September 2, 2002 9:40 PM PDT

Microsoft unveils new keyboards, mice

Microsoft on Tuesday launched its fall line of mice and keyboards, as the company looks to gain share over rival Logitech.

But the new peripherals are only a first strike, as Microsoft prepares Bluetooth wireless mice and keyboards for November availability. Wireless is the hot growth area for the peripherals, analysts say. It's also a market where Logitech has consistently executed better than Microsoft.

"Logitech has made a business over the years of dancing around Microsoft and being competitive on the technology, great packaging and good pricing as well," said NPDTechworld analyst Stephen Baker. He added that Logitech was doing better with wireless mice and keyboards, where margins and profits are better than for their corded cousins.

Microsoft's bigger announcement could come some later next month, when the company unveils Bluetooth mice and keyboards. Bluetooth is a wireless radio technology that allows peripherals to connect to a PC up to a radius of about 30 feet. But the technology has been slow to take off, even at Microsoft. The software giant shipped Windows XP without Bluetooth support, which is still a future addition to the operating system.

Microsoft's "Bluetooth compatible keyboard, mouse and USB transceiver are designed for those who prefer the advantages of wireless technology and appreciate the ultimate in style and performance," Matt Barlow, the company's group product manager for hardware, said in a statement.

"Bluetooth is one of the most advanced cable-replacement technologies available today, and it will enable consumers to wirelessly connect enabled devices, such as mice, keyboards, printers, PDAs and cellular phones, to the wealth of information on their PC," Barlow said.

For now, Microsoft is waging a war against Logitech with traditional wireless, or cordless, mice and keyboards. Three of Microsoft's seven new products unveiled Tuesday are wireless: one mouse, and two mice and keyboard combinations. All sport new styles and color. Microsoft expects the new products to start appearing on store shelves later this month.

Like many of the peripherals, Microsoft's new wireless optical mouse features an astral blue finish; the product's estimated retail price is $45. The new cordless mice and keyboard packages--the Wireless Optical Desktop and Wireless Optical Desktop Pro--sport a titanium and black motif, and sell for an estimated $85 and $105, respectively.

Microsoft also unveiled two new tethered mice, both decked out in blue and selling for an estimated $35 each. The Microsoft Optical Mouse Blue is a typical desktop mouse, while Notebook Optical Mouse is the company's first model for use with laptop computers.

The computing giant also released a new MultiMedia Keyboard for $35 and $55 Natural MultiMedia Keyboard, Microsoft's ergonomic model.

Wireless wars
Microsoft's new mice and keyboards could increase the pressure on Logitech, particularly as the companies prepare for the lucrative holiday season, analysts say.

In terms of retail mice sales, Microsoft and Logitech each had about 30 percent market share for the four quarters preceding the second quarter, according the market researcher NPDTechworld. But in the second quarter, Microsoft gained slightly, while Logitech fell dramatically. Microsoft had 31.1 percent market share compared with Logitech's 24.8 percent.

"That's the best Microsoft has done in a while," Baker said. "But in the breakdown, Logitech did much better with cordless mice."

Cordless mice accounted for 12 percent of the overall retail mouse market, according to NPDTechworld. But the category represented 27 percent of Logitech's mouse sales versus 8.5 percent for Microsoft.

"Logitech the last few quarters has been much more focused on cordless than has Microsoft," Baker said. "They've been able to jump out ahead, and if you look at average prices you see why you want to be in cordless."

The overall average retail selling price for mice was $23, $27 for Microsoft and $30 for Logitech during the second quarter. But cordless mice average selling prices were much higher: $46 overall, $48 for Logitech and $59 for Microsoft. Logitech's bigger share here coupled with the higher margins and profits on the cordless mice in some ways puts Logitech ahead of Microsoft, Baker said.

Microsoft also led over Logitech in retail keyboard sales, with 26.6 percent market share compared with 24.3 percent, according to NPDTechworld. But instead of losing share, Logitech has been steadily gaining on Microsoft, moving up about 5 percent share over the past three quarters.

Though cordless keyboards accounted for only 14.5 percent of the overall market, they represented a whopping 50 percent of Logitech's sales compared with less than 5 percent for Microsoft.

"Keyboards have been very successful for Logitech in terms of this wireless thing," Baker said.

Keyboards sold for an average $30 at retail, according to NPDTechworld. Microsoft keyboards sold for an average $39 and Logitech's models for $48. Wireless keyboards, on the other hand, sold for much more: $70 overall, $68 for Microsoft and $72 for Logitech.

 

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