Logitech CEO Hanneke Faber wants your next mouse to last forever

Today, I’m talking with Hanneke Faber, the CEO of Logitech. Hanneke’s still pretty new to the role: she joined the company last October, after the former CEO, Bracken Darrell, left.

You might remember Bracken — he was on Decoder back in 2021, basically at the height of the covid-19 pandemic-era boom in home office sales, when Logitech was selling mice, keyboards, and webcams as fast as it could make them. 

Obviously, things have changed since then. Logitech, like so many companies that saw huge pandemic booms, very abruptly saw that growth slow down when the world began to normalize. Bracken left Logitech last June to go to the company that owns Vans and Supreme, and Logitech brought on Hanneke, a longtime executive with an extensive background in consumer goods at conglomerates like Unilever and Procter & Gamble.

Hanneke and I talked about the structural changes she’s already making at Logitech and the changes she intends to make in the future. It sounds like some Logitech products, like its smart home doorbells and cameras, are not long for this world.

Hanneke says that people often say “the mouse built this house” inside Logitech, which is a delightful catchphrase I’d never heard before. From there, we talked about how new interface paradigms like voice and AI might upend mice and keyboards and how she’s thinking about the company’s long-term future in a world where traditional PC sales might go down.

Of course, we talked about whether anyone wants their mouse to be anything more than a mouse — Logitech is adding AI features and even AI buttons to some of its products, and I wanted to know if that’s working. 

You’ll hear Hanneke talk about a concept called the “forever mouse,” or a mouse you buy once and upgrade over time with new software features — features that, of course, might carry a subscription fee. Subscription mice! It’s a lot.

You’ll also hear Hanneke talk about how she plans to grow the business and hit an ambitious carbon footprint reduction milestone by the end of the decade as well as where she thinks the company needs to go next. There’s a lot in this one.

Okay, Logitech CEO Hanneke Faber. Here we go.

This transcript has been lightly edited for length and clarity. 

Hanneke Faber, you are the new-ish CEO of Logitech. Welcome to Decoder.

Thank you so much.

I am really excited to talk to you. You have been on the job as CEO for seven months now?

Seven months. I started on December 1st.

So you’re in. You’re settled. You know where the bathrooms are, which is step one.

Yeah, for sure. Although today’s my first day actually in the office in California. I’ve been in Switzerland so far, so you catch me on day one.

Well, I’m just going to ask you where different things are in that office for the rest of the hour. 

[Laughs] 

Logitech is a fascinating company. It’s one of those companies that I think is undercover. When we started Decoder, one of our first ideas was that we should talk to more than five CEOs, and Logitech is one of those companies that is just ever-present in the world of technology. It is a partner to the big companies. It’s in everyone’s office. It’s in lots of people’s homes. It’s basically a core fixture of gaming. You play in a lot of spaces.

I talked to your predecessor, Bracken Darrell, in the middle of the covid-19 pandemic in 2021, when everything was a lot different. Sales were skyrocketing, and he changed his strategy a little bit. Bracken recently left. He now runs Supreme and Vans, which was a shift. We’ll talk to him about that. You have a background in consumer goods at Procter & Gamble and Unilever. Why jump to Logitech when the job opened up?

Actually, Bracken came from P&G as well, so that’s not so different. But I’ve been really fortunate throughout my career of working in different industries. I worked mostly in beauty at P&G. I actually worked in tech for four years at Ahold Delhaize. I ran their e-commerce business when it was almost nonexistent. We built a really cool online grocery business. And then, for the last six years, I ran Unilever’s global food business.

So [despite being] different businesses, I think there are some themes that apply to Logitech: a focus on the user and the consumer first; a focus on innovation and product. And then, finally, really global footprints in every job I’ve worked in and a mix of B2B and B2C. All of those things do translate. Of course, this is a new industry and a new company for me, but it’s great to bring a whole bunch of things that I have experience with and learn a few new things as well.

One of the things that’s really interesting to me about Logitech is that people tend to think of its core products — mice, keyboards, headsets, webcams — as commodities, but they’re still technology products. There’s a lot of innovation left in those spaces. Logitech has driven some of that innovation, but then you see other weird things blossom into cultures unto themselves — mechanical keyboards, for example. There are webcam startups again, which is really interesting. That was not a thing that was happening pre-covid. 

Do you view the opportunity here as an operational opportunity, as an innovation opportunity, as a “find new categories and make them grow” opportunity? What is your macro view of the situation?

There are three main tailwinds on our core business. The first one is new ways of working, hybrid working. That’s good for our personal workspace business, the traditional mice and keyboards, because everyone needs multiple setups. And obviously it’s good for our video conferencing business. So the new ways of working post-covid are a real tailwind for us. 

Second is gaming. Gaming, just as a space, continues to grow, and especially with new demographics. Almost half of gamers are now women, which is amazing. And older people game. It’s no longer just teenage boys. We see the market continue to grow.

Wait, can I ask you one question about older people in that context? 

Yeah. Sorry, older than teenage boys?

Sure. Is it that a set of teenage boys who were gamers 15 years ago got older, or is it older people are becoming new gamers?

I think we’re seeing a little bit of both, although it’s probably the first trend that is the biggest one. The teenage boys of 15 years ago are now in their 30s and 40s, so that just extends the demographic. New teenage boys are still coming in, and girls, so that’s good. But we’re also seeing older cohorts coming in mostly through mobile, through Candy Crush but also Wordle and Connections. Those are entry points into gaming that make them more comfortable with gaming and may take them to PC and console gaming as well.

You said there was a third thing. What was the third thing?

The third thing… of course you can’t do an interview for three minutes and not say AI, but AI is a real tailwind for us as well.

How do you think AI is a tailwind for Logitech in particular?

In three ways. First, like for any other company, is internal productivity. We’re seeing it on the software engineering side, where coding and testing have clearly become more efficient, but we’re also seeing it on the creative and brand-building side, again, where things are getting more efficient but also sometimes more creative. 

More importantly, on the product side, there are two ways in which AI will be a tailwind. First of all, we’ve always been a human-to-technology interface company, and we’re starting to be an interface to the large language models. A couple of months ago, we launched the Logi AI Prompt Builder, which is basically a shortcut in our software to ChatGPT. It has millions of unique users already, and it’s just a simpler way for people to use ChatGPT and not get out of their flow when they use all of our mice and keyboards in English-speaking countries. There will be much more to follow in terms of being that human-technology interface.

There’s a third area that is big on AI, which is in audio and video. We have a big video conferencing business, a headphones business. That’s really machine learning and large data models, and the company’s been at those for a number of years, but we’re seeing the quality of things like two-way noise cancellation or video conferencing equipment that actually knows when to zoom in on you when you’re speaking and not when you’re opening a packet of crisps. Those kinds of things are really important, and I foresee massive quality improvements thanks to machine learning in the years ahead.

I want to come back to the AI question because I think there’s a lot to unpack there, and there are a lot of obvious opportunities, like you said, in audio and video. And then there are some opportunities that, I think, deserve a little more time around AI prompt building and that sort of thing. 

But I want to stay focused for a second on you. You’re the new CEO. So covid, work from home, created a massive opportunity for Logitech. I bought a black market webcam at the end of 2020. It was Chinese. It wasn’t even meant for this market.

I love it.

The previous administration really ramped production. They saw huge growth. Then there was an enterprise push as more and more companies embraced hybrid and remote and refitted all their conference rooms. That all crashed back to earth, and there were a couple of years when the growth was falling. Logitech’s fourth quarter earnings released back in April marked your first quarter of sales growth in over two years. You also reported growth in your most recent quarter. What is bringing that growth back?

Product innovation and markets that are stabilizing a little bit post-covid [are contributing to that growth]. I have to say, this company should be very proud of what it did during covid under Bracken. It did a really great job, but obviously it was a bit of a sugar high. That said, the company is 50 percent bigger today than it was pre-covid, so it hasn’t all come crashing down to earth. 

I think what we’ve done is we’ve really been focusing on great execution and on things that we can control. There are some things that we can’t control: inflation, consumer confidence, corporate IT budgets for our video conferencing business. But within those constraints, we’ve been growing our share. That was one of the drivers of us getting back to growth in Q4. We’ve been delivering really exciting innovation, and we’ll continue to do those things.

You called it a sugar high. I feel like the broad story of tech in particular is the sugar high of overinvestment during covid, of competing to hire every single person that existed in the world who could write code and then assuming that those trends would be permanent and we would all stay inside and live our lives mediated through screens on the internet forever. Many companies did not survive that sugar high. Is it that simple, that Logitech just weathered the covid highs and the trends and is back to a stable place now?

We’re not back to where we were in 2019. Again, we’re 50 percent bigger as a company, and the way people work is so different today versus 2019. Virtually every company that I speak to, and I speak to many of them because they’re all our customers, wants to be hybrid. They want their people to come into the office two or three days a week, but they also want to offer the flexibility of working from home or working from anywhere. That is obviously very different from in 2019. We pride ourselves on being a model for ways of working because we sell this stuff, so I think we’re very well positioned to help our corporate customers give people a great experience both in the office and at home.

You mentioned that you are in the California office today, and it’s your first day there. You moved to Switzerland when you got this job. How are you structuring your time between remote, hybrid, and in person? How’s that working for you?

Sadly, I live on an airplane, it feels like. Logitech is very special in that it is a super global company. We’re on the ground in more than 100 countries, and we have great capabilities around the world. I spend probably 60 percent of my time in offices that are not my own. When I’m in California, or I spent these first seven months [on the job] in our Swiss office, I try to be in the office. But I might also, if I start early — like today, I started at 6AM — go back home at 1PM and get some exercise and then work more later on. That’s a level of flexibility that I don’t think we necessarily had pre-covid, which is great.

Do you ever find yourself in that horrible situation of being alone in a conference room on a video call?

That’s just ridiculous, right?

That’s my nightmare. If I go to the office and I’m the only one there and everyone else is on a video call, I wonder why we even have an office.

[Laughs] Yeah, absolutely. Well, we have this concept of gravity days at Logitech. On the gravity days, everyone’s there so you’re not by yourself.

What are the gravity days?

It depends on the teams. My gravity days here are Tuesdays and Wednesdays, so I’ll see most of the leadership team. But different teams have different gravity days that they pick themselves.

And then are you living on a plane just to be in person wherever you need to be?

Yes, and part of that is because I’m new — and I’m not just new to the company; I’m also new to the industry. I need to meet people, our own people, but very much also suppliers, customers, consumers, investors. There are just a lot of people to meet, and certainly a first meeting, I think, is still best done in person.

This brings us very neatly to what I think of as the Decoder questions. I was listening to the first fireside chat you had for your investors five days into the job, and I heard you say that your style is to be as close to the customer and as close to the people doing the work as possible because they know best. That’s you on planes. But ultimately, you have to make a lot of decisions. What kind of decisions do you want to be making? What’s your framework for making them?

I think company strategy is a great way to set that decision framework. I’ve spent a lot of time in the last six months, first listening, then co-creating that strategy, and then setting the strategy and setting the bar high. If I unpack that a little bit, there’s lots of stuff I don’t know and that we all don’t know, so listening was first. Then we sat down with the leadership team first to really make choices. What’s our goal? For 2031, because that’s when Logitech will be 50 years old, we set a goal of doubling the business and reducing our carbon footprint by 50 percent while retaining really attractive margins. 

We set a mission, which we’ve said is extending human potential in work and in play. We had a good mission, but it was three pages long, so I really wanted to simplify that. And “extending human potential,” those words are carefully chosen. So “extending” is obviously a riff on the mouse. The mouse built this house. It extends your arm, so we want to extend—

You say, “The mouse built this house”?

Yeah, that’s what they say here — and I say it. I like it.

That should be the whole mission, I got to be honest with you. I think it’s a strong contender. 

That’s right. But we extend human potential in this age of AI, this age of [Zoom CEO] Eric Yuan saying there are digital twins of all of us coming to meetings. It’s really important that we extend human potential because we can make humans better. We can help you win that game. We can help you be more productive. We can help you connect better when you’re in that conference room by yourself. If we can do that in ways that are also healthier for people on the planet, then extending human potential is really worth waking up for every morning.

And what else is there in life but work and play? We do that in work and play today, but I believe, with my leadership team, that those areas are actually much bigger than where Logitech plays today. Today, we’re mostly focused on work. We focus on office workers. Most people in the world don’t work in an office. They work in retail, healthcare, education, construction, you name it. And we can play there, too. And in gaming, we’re mostly focused on PC gaming. Today, there’s a lot more play out there than just PC gaming. That broadens our TAM, our total addressable market, for the future, which is an opportunity to deliver that growth.

That’s a long-winded way of saying what we’re doing. That is our framework for decision-making. We’ve then made some pretty clear choices where to play and how to win below that, and now that that is in place, as a leader, I can circle back and say, “Okay, I listened. We co-create it and we set the bar high.” Now, I circle back and I listen again. I go back and I listen to people and say, “What do they need? What obstacles do I need to take away so that they can deliver on doubling the business and reducing the carbon footprint by half?”

What kind of obstacles have you removed so far?

Well, we’re in the process [of doing this]. I think some of those obstacles might be the result of that sugar high. We got a little complicated in our organization because we had a lot of people, and that usually makes things a little more complicated. So we’re about to do some simplifications and also invest some more money in areas where we’re maybe not quite as good as we need to be. 

Historically, we’re a fantastic B2C company. We sell our stuff to Amazon, to Best Buy, to MediaMarkt. That’s who we are. B2B is much newer. And again, Bracken and the team did a great job of building a B2B business from scratch with a really disruptive video conferencing product. But we’re like teenagers in that space. I wouldn’t call us babies, but we’re like teenagers. If you compare our capabilities, especially on the go-to-market side, to some of the more legacy players in B2B, we’re just newer. That’s a place where we will be investing, and that’s been an obstacle.

You have brought up changing the org chart, which is bait for the show. That’s what Decoder is all about. When I talked to Bracken last, I will never forget it, he described one of the most complicated org charts I’ve ever heard. It seemed to be working. He seemed to be happy with it. He told me, and I went and looked it up, he had 23 direct reports. Most of the teams across the company were set up to be almost completely independent, and he was totally fine with duplicated efforts and resources. 

So if two teams were both going to do microphones, that was fine as long as they were both going to market and the teams independently were profitable or successful in their own way. I think he told me there were something like 20 or 30 product teams just running under the various brands. That feels like the thing you’re about to change. Is that what you’re changing?

Yeah, and again, I don’t want to blame previous setups because they were working for their time. The track record of value creation here at Logitech is fantastic. But I think now what I’m hearing from our people and what we’re seeing in some of the results over the past few years is that we do need to simplify because things have gotten a little bit too complicated. 

Part of that, by the way, is the brand story. Logitech tried to become a multi-brand company, but today, 97 percent of our sales are in the Logitech brand, Logitech and Logitech G, and I consider those one brand, really. So it’s important that we make sure that 97 percent of our resources are focused on that brand and that we don’t get too scattered around the company. That’s one of the other strategic choices that we’ve made: we will build one fantastic iconic Logitech brand, and that’s our focus.

A lot of the other brands you’re describing are the result of acquisitions. There’s Ultimate Ears, Jaybird, Blue Microphones, Streamlabs — and the list goes on. There have been a lot of acquisitions and there are a lot of new products. Then there are attempts to be more consumer with the Logi brand. Is all of that stuff going to come in under Logitech, or are you going to leave those alone?

Well, again, it’s the tail wagging the dog, right? It’s very, very small. And some of it has already been folded in successfully under the Logitech brand. If you look at Astro, which was a really good acquisition, it’s now part of Logitech. That makes a lot of sense. And it absolutely doesn’t mean we won’t do acquisitions in the future, but again, when they can be folded in, they probably should. 

There are much, much bigger companies with much bigger brands that don’t rely on a whole stable of brands. So I’m excited about that. And then you also mentioned product development and engineering, which, of course, is the heart of this company. Again, there’s probably room for a little bit more synergy, and this is, by the way, not about cost-cutting. It’s just about getting more out of the resources that we have if we talk to each other a little bit more.

I’m assuming you’re not going to stick with 23 direct reports and a bunch of basically startup founders everywhere. 

I already haven’t, that I know.

To your point, it worked.

Absolutely.

I remember talking to Bracken. I was like, “That sounds pretty fun,” and he seemed like he was having a good time. But you need to change it now. How are you doing that? What’s the structure now?

I’m already down to 12 or 13 direct reports, so it’s already streamlined in that way. I think running the company along the lines of three big businesses — personal workspace, gaming, and Logitech for enterprise — is a really important way of going forward, and that’s what we’ll be doing. 

Again, historically, we’re very much a consumer company, so across [personal workspace solutions] and gaming, we’ll be focused on the end user to consumer, the customer, Amazon, Walmart, Gigabyte, MediaMarkt, etc. And B2B is a different kettle of fish where we still have to build significant capability, which is a huge opportunity because, again, we’ve got fabulous products for corporate customers, and our penetration is still very low. So I’m really excited about the growth potential of our B2B business.

Inside of that structure, which feels like a go-to-market structure, you’ve got the three big consumer segments, and you’ve got products that might move between them. You do still have some brands that people love. Ultimate Ears is a brand that I love. That was my first fancy pair of headphones. You have Blue Microphones, where half or a quarter of the podcasts in the world are on fancy Blue Microphones, and they’re a fixture of all the studios. Are you going to leave some of those to their high-end customers?

Yeah, absolutely, and we retain a small Ultimate Ears team who are doing great stuff. They just launched the new Wonderboom, which is a super cool product. The same is true for Blue. Absolutely, those little teams, again, we’re super sufficient and scrappy on those, but they’re great products and they’ll stay in place and they’re as loved as the big dogs.

When you were going through and saying, “Okay, I have to fold some into the three big buckets and I’m going to leave some of these alone,” what was the framework you used? What was the marker for you to say, “Okay, we’re going to set Blue aside, but this one we have to fold into the main consumer Logitech brand”?

I think the framework is a framework of growth. So if we want to double the business by 2031, then you work back and you say, “Okay, what do we need to do?” Well, we need to grow organically, mid-single digits, and we want to do some M&A. What are the spaces that we’ll play in? It will be work and play and it will be B2B and B2C. Then, when you look at the building blocks, the big chunks will be in B2B video conferencing and personal workspace products, in gaming and in PWS products. 

So then, underneath that, yes, you have to fit in some of these smaller pieces, and that’s totally fine. I’ve always found throughout my career that it’s actually fun to work on some of these smaller pieces because you have a little more freedom. If you do well, people think you’re fantastic. If you don’t do well, it doesn’t really matter. So that’s a nice place to be in.

One of the other things you said in that investor call, which is also just pure Decoder bait and I thank you for it, is that one of your core beliefs is that companies are perfectly designed to get the results that they are getting. Whatever result you get you can just run right back to the structure of the company. Explain that in more depth.

The results that we got last quarter, which we’re actually pleased with because we were back to growth and we had really good margins, are the result of the structure that we had then. Now, I’m a big believer that you have to make a few changes if you want to get, in our case, even better results, a little faster growth with the same margins, and not unimportantly, reduce that carbon footprint by 50 percent. If you expect the same results, then it’s fine to stay with that same organization. If you expect results that are a little different, you need to make some tweaks. Again, I don’t think Logitech is a disaster turnaround story at all. This is a good-to-great story. But if we want to be great, then we have to make some tweaks.

As you think about changing the structure, you talked about your process here tonight. You talked to everybody. You listened. You co-created some ideas. There are some goals here. You’re saying, “I’m designing a structure to get to some very explicit, probably measurable goals.” Do those look mostly like growth? Does it look like product innovation? Does it look like flipping the apple cart over and inventing the next iPhone?

This is a product and innovation company at its heart. So that’s the way we grow, with great, fantastic products that our users love. But that’s the what and the how. In terms of the outcome, yes, it’s about growth. So we’ve said we want to double the business by 2031 and reduce our carbon footprint because that’s something the company committed to well before I got here, which is not so easy to do when you double your business because each one of those mice and keyboards emits more carbon. Then, of course, we want to create great value for investors. So gross margins and operating income margins are important, and we’ve guided for some really attractive levels.

You’re the new CEO. You got hired by a board of directors. Some of that board of directors is leaving. You’re going to have some new members that the shareholders can vote for. You’d like them to vote for you to be added to the board of directors. 

When you set that goal and you say, “I’m changing the structure of the company,” or even when you’re interviewing for the job, did you come in and say, “Look, I think we should double the size of the company by 2031”? Was that the pitch? Was it, “I think there’s a new vision”? Now, when you’re actually executing and saying these things out loud, do you feel the pressure to grow from your investors or your board members? Where does that come from?

I would say, first of all, on the process to get this role, kudos to the board of Logitech. I thought they did a really great job in the interviewing process, where, I’ll spill the beans, but they asked each of the candidates to do a 15- to 20-minute presentation on what they thought the company should be. Now, of course, as an external candidate, you do that not knowing a whole lot. 

So, while some of the themes I talked about have come back in my actual strategy, some of the things have changed because obviously I know a lot more now than I did before I joined. But that was helpful because it allows the board to see where the candidate wants to take the company. But you’d be surprised that not all boards do that. 

So that was the hiring process. You didn’t walk in saying, “I’m going to double the size of the company.” But now is when you’re saying that? 

Yes.

And is that a decision that is coming from the board in service to its investors?

No. Again, this is listening, co-creating, and then engaging with the board deeply on “does this make sense — these goals, this vision?” And then these “where to play” and “how to win” choices, do those make sense? The board was a really important stakeholder, obviously, in finalizing that. But so were the people of Logitech. I’m a big believer in co-creation, and that’s not just co-creation with the leadership team. 

We actually invited all 7,000 employees to come to co-creation sessions around the world where we shared with them an MVP of our strategy. But then we said, “Tell us three things you’d like and three things you want to add or change.” We had great feedback on that, and that really shaped the final strategy.

What was the biggest thing that you added or changed or the biggest thing that people really liked?

What they really liked is the continued focus on products and innovation. Again, that is our lifeblood, and we have so many fantastic engineers and designers, so that came out very, very clearly. I think what surprised me was actually the passion for sustainability. There’s a huge passion around the world for what we can do to lead in tech on reducing the carbon footprint where there’s a lot of greenwashing and a lot of increasing carbon footprints, unfortunately, in the age of AI. There was more passion for that topic than I had expected. So again, it’s important in our strategy going forward.

Let’s talk about the products. They are the lifeblood of the company. I’m going to say “the mouse built this house” all the time. It’s very good. I can’t believe I never knew that before. It’s a pretty sprawling product lineup. You’re in a million categories. How did you acquaint yourself with all of it?

There are three big ones. 

Well, sure, but everything from smart home doorbells to mice to headphones, it’s a lot of things.

I think those are pretty much gone.

So wait, you’re going to leave the smart home?

No, there’s our timing. I need to double-check, but I’m not even sure those are still being sold. It’s really personal workspace, video conferencing, and gaming.

What about all the customers you sold smart home cameras to who have cloud service dependencies?

We’ll continue to support, of course, what we’ve sold for some time.

I’m always curious because every new category now has some sort of ongoing service dependency, which feels very risky. Our audience is constantly telling us that one reason they go back to big companies over and over again and won’t buy products from challengers or startups is that they don’t want their products to disappear. And then big companies like Google have broken that trust anyway. This is a really ongoing conversation with The Verge audience. It must be new for you. When you were at Procter & Gamble, I’m assuming people didn’t buy shampoo and then worry you were going to stop selling shampoo.

That’s so true, and it’s such an interesting topic. Actually, at Procter & Gamble, we did get lots of people calling when you took their lipstick shade out, but that’s a little different. There’s no software inside.

Yeah, you weren’t breaking all the existing lipsticks that had been sold.

Exactly. Again, this is a space that’s somewhat newer for Logitech, but it’s incredibly strategic. We don’t do just pure hardware. We do design-led, software-enabled hardware, and that software component in the age of AI is more important every day. The services that we provide to our corporate customers are actually a nicely growing part of the business that didn’t exist a few years ago because Logitech was new to B2B and wasn’t charging for its services. Now we are. 

I think we deliver great software services to our B2B customers, but we are learning. On the consumer side as well, through Logitech Options Plus, the software, it’s very important to deliver superior products for our users. We now have more software engineers than hardware engineers, which is a big milestone.

This comes up in surprising ways on Decoder. The CTO of John Deere once told me that John Deere has more software engineers than hardware engineers because it has to support the ongoing service and cloud capabilities of the tractor. This makes a little more sense for Logitech, but really what we’re talking about is an ongoing cost. You sell me the keyboard once. It’s got Options Plus. It has an AI button. I push the button, and someone has to make sure the software still works. Someone probably has to pay ChatGPT for access to the service. Where is that going to come from? Are you baking that into the margin of the keyboard or the mouse?

Absolutely. We’re baking that in, and I’m not particularly worried about that. What I’m actually hoping is that this will contribute to the longevity of our products, that we’ll have more premium products but products that last longer because they’re superior and because we can continue to update them over time. And again, I talked about doubling the business and reducing the carbon footprint by half. The longevity piece is really important.

I’m very intrigued. The other day, in Ireland, in our innovation center there, one of our team members showed me a forever mouse with the comparison to a watch. This is a nice watch, not a super expensive watch, but I’m not planning to throw that watch away ever. So why would I be throwing my mouse or my keyboard away if it’s a fantastic-quality, well-designed, software-enabled mouse. The forever mouse is one of the things that we’d like to get to.

What made the mouse a forever mouse?

It was a little heavier, it had great software and services that you’d constantly update, and it was beautiful. So I don’t think we’re necessarily super far away from that.

But, again, I just come back to the cost. You sell me the mouse once. Maybe I’ll pay 200 bucks for it.

The business model obviously is the challenge there. So then software is even more important when you think about it. Can you come up with a service model? In our video conferencing business, that is now a very important part of the model, the services, and it’s critical for corporate customers.

Let’s come to that in a second because that makes sense to me. You sell managed services to enterprises. You price support contracts for cameras and whatever. That’s an ongoing need businesses have. I’m still stuck on, “You’re going to sell me a mouse once and it’s going to have ongoing software updates forever.”

Imagine it’s like your Rolex. You’re going to really love that.

But Rolex has to employ software engineers to ship me over-the-air updates forever.

But the artifact is like your Rolex, and then given that we know the technology that we attach to changes, it’s not going to be like your Rolex in that it doesn’t have to ever change. Our stuff will have to change, but does the hardware have to change? I’m not so sure. We’ll have to obviously fix it and figure out what that business model is. We’re not at the forever mouse today, but I’m intrigued by the thought.

It certainly will help with sustainability. There are two ways people have traditionally proposed monetizing hardware over time. It’s subscription fees and it’s advertising. Is there a third way that I don’t know about that you’re thinking of?

No. The third way is the traditional model of “we innovate and we have you upgrade.” That’s the current model. And we’re pretty damn good at that model because we have pretty damn good innovators around the company who do come up with fabulous products. 

That is definitely the model today. It’s not a bad model at all, especially since we’re continuing to design for more sustainable products. We’re continuing to recycle and refurbish products. All of that is good. But that said, I am intrigued by a forever mouse or forever video conferencing solution that you just update with software and create a business model around that.

I’m going to ask this very directly. Can you envision a subscription mouse?

Possibly.

And that would be the forever mouse?

Yeah.

So you pay a subscription for software updates to your mouse.

Yeah, and you never have to worry about it again, which is not unlike our video conferencing services today.

But it’s a mouse.

But it’s a mouse, yeah.

I think consumers might perceive those to be very different. 

[Laughs] Yes, but it’s gorgeous. Think about it like a diamond-encrusted mouse.

You mentioned AI earlier. You have rolled out some of the AI features in the new versions of Options Plus. There is a mouse with an AI button.

Actually, sorry, Nilay. I am going to give you just a little piece of information. So the mouse built this house. Is that a traditional category? Will it go away? Is it old and tired? We don’t believe so because only about 50 percent of people use a mouse and a keyboard today, a separate keyboard.

Some only have a mouse or only a keyboard, but many of them have both. But the thing that shocked me was that the average spend on that globally is $26, which is really so low. This is stuff you use every day, that sits on your desk every day, that you look at every day. That’s like the price of four coffees at Starbucks or less than a Nike running shirt. There is so much room to create more value in that space as we make people more productive — to extend human potential.

Do you think the growth comes from going from 50 to 55 percent, or does it come from selling the 50 percent more expensive products? 

Both. Absolutely both. That’s why this is still an exciting category.

One of the things about keyboards in particular is that they have become lifestyle items. You see influencers on TikTok talk about their setups. We run photos of people’s setups. People have deep abiding attachments to their key switches in their keyboards. I’m assuming this is new to you, unless you were a diehard mechanical keyboard fan before, which would be amazing. You’re looking at it from a background in consumer products. What’s your view of that, of the keyboard as a lifestyle product?

I definitely think it’s an important lifestyle product. Obviously, on the gaming side, it’s a really important lifestyle product, and again, it’s a real growth opportunity for us for many years to come. On the work side, what I’m intrigued by is that the needs of different people are very different when it comes to keyboards and mice. So we have done a nice job of growing this business by targeting different groups. 

You have advanced users: a software engineer; a financial analyst who is in Excel all day. They need our MX line where you can do tons of shortcuts. I met someone over the weekend who — I didn’t even know this was possible — had done 120 shortcuts on one of our mice. I’m like, “What? I’m proud I have four.” But anyway, these are super advanced users, and we make MX products for them.

Then you have people who have some wellness issues because they’re also typing all day, but they’re sitting at the kitchen table or on an airplane like me, and they’re screwing up their arms. So the Ergo line — also very premium, very beautiful — is really made for them. I use an Ergo keyboard. It’s fantastic. It really helps on the shoulder and the arm. Then you have more lifestyle, younger people, especially in China, who want the pink mouse or who want the mouse that goes with the latest game. So these are really different groups, and I think we have opportunities to go even deeper on those consumer needs to build exactly the right products for them.

That differentiation between gaming and professional and lifestyle, you can pull them apart. I think a lot of companies try to pull them apart. But I think, from my view, they’re getting mashed together. The needs of a gamer and the needs of the Excel macro fanatic, they’re more the same than different in some cases. And then the high-design lifestyle category and gaming as a lifestyle are also the same in very important ways. How do you pull those apart? What’s your approach to that, especially because you have a view from the outside?

Absolutely. It’s funny. It’s an “and, and.” In some cases, you’re absolutely right, things are blurring. In China, we’re seeing a lot of people working with our gaming stuff, but then there’s also complete bifurcation. Our top-of-the-line gaming mouse is the Pro Light, which is the most simplistic-looking from the outside: a super light, thin thing with a lot of exciting software inside. Whereas our top-of-the-line MX mouse for advanced users is not at all minimalistic because it has 18 buttons and scrollers and whatever. You’ll see the same guy who’s a software engineer by day and a gamer by night use both. So it’s a “yes, and.” And again, it’s really important we understand all of those users and that we build fabulous products for them.

The really interesting thing about keyboards and mice is that they’re tied to desktop computing as a paradigm, particularly mice. You can plug a mouse into an iPad, but why? You can buy the case, and Apple has a lot of decisions to make about the future of the iPad, but really what we’re talking about is desktop computers: macOS, Windows, Linux, big monitors maybe.

There’s an endless prediction that this will go away, that mobile will take over everything. That prediction does not appear to have borne out. When you’re thinking about Logitech’s markets, how do you evaluate that? Is it that eventually everyone will just have a phone and the laptop will go away? Even if the evidence doesn’t seem to bear it out, it is a permanent prediction in the tech industry.

It’s definitely a permanent prediction. As I onboarded at the company, I had a few history lessons. I went through historical documents, and this same thing came up 20–25 years ago: the PC is imminently disappearing. That has not happened, but that doesn’t mean we shouldn’t absolutely be paranoid. One of our innovation streams is called “Beyond the PC,” and we’re dedicating significant resources to innovating beyond the PC.

Of course, some of what we sell today, quite a good amount of what we sell today, video conferencing, is already beyond the PC. That’s important. If you look at one of our recent innovations, we announced two weeks ago the MX Ink, which is a stylus for the Meta Quest. That’s definitely beyond the PC. So hopefully you get a sense of what we’ll need to do more of in this space, but we know how to do it. I like this example a lot, the MX Ink stylus for Meta, because it’s beyond the PC but also helps us think about work beyond the office. Who’s going to use that stylus? It’s creative people, it’s doctors. It’s not your traditional office worker.

One thing that’s really difficult about going beyond the PC is that there are vastly more gatekeepers once you leave the realm of Mac and Windows. It’s Apple and Google in particular. There are things that they will simply not allow you to do with their devices. There’s software you can’t ship. There are drivers you can’t load. There are peripherals that won’t attach, all the way down the line. Has that been a bit of a wake-up call?

Well, it’s been an area where I’m actually very impressed. Logitech, I think, has the best set of partnerships in the industry, and it’s proud of it and it nurtures those partnerships. Whether it’s Microsoft, Alphabet, Meta, Apple, Zoom, we work closely with all of them, and we’re able to develop products with and for them, including Apple, which is fantastic but a little secretive at times, which is their right and they’re amazing.

We just came out with a Combo Touch for the new iPads, which is a beautiful product, and we work with Apple with Berlin walls around [those products]. So it’s kind of funny. My team in Taiwan who works on that, they were wearing T-shirts when I came that said, “My work is so secretive, I don’t even know what I’m working on.”

[Laughs] That’s very good.

But that’s a really close collaboration with a fabulous company, Apple. MX Ink is an example of Meta. And obviously we’re very close in our video conferencing business and beyond to Microsoft, Google, and Zoom. It’s a unique set of partnerships. This company was born as an American and Swiss company. That neutrality of working with all these partners is where the Swissness comes to life best.

Let me ask you to compare more directly. A lot of times in the tech world when people complain about app store policies or restrictions on what the OS will let you do or the Apple tax, the immediate comparison is, “Well, Walmart controls what goes in its stores,” or, “Target controls what goes in its stores.” You used to work on Head & Shoulders, and if you wanted the end cap at Walmart for Head & Shoulders, you had to pay them some extra money for additional marketing. The analogy is there. It comes up all the time.

You’re a very unique person to ask this question of, because I have always thought, well, Walmart has competition. If you’re not getting a favorable rate to put the shampoo in Walmart, you can go to Target or the grocery store or Walgreens or wherever else. The platforms do not have that in that way. Have you felt that yet in your seven months?

You’re right that they don’t in that way. If I use video conferencing as an example, there is competition. Microsoft is obviously very large, but there is Google and there is Zoom. We do work really well with all three of them and we value all three of them and we put significant resources against all three of them, and they do the same with us. It’s not like there’s only one. And that’s true when it comes to virtual reality as well as beyond the PC. It’s a real competitive advantage for Logitech to have this range of partnerships and not just be in bed with any one of them.

Are there things you’d like to build or ideas you’ve heard that are being blocked by the various rules that the mobile platforms have in place?

No. Again, it’s been seven months so this may change, but from what I’ve seen, we can talk about everything, including with the very big boys. I love that and I think that will lead to some really great innovation going forward.

But if you wanted to have the AI button on a keyboard connected to an iPad that brought up your overlay and Options Plus to create a prompt, Apple would simply not let you do that on iPadOS in the way that you can on Windows and macOS.

Yeah, and again, I’m not sure that’s something we would die on our sword for.

Makes sense. The other piece of the puzzle here is basically everybody at some point tells me that they won’t die on their sword to continue connecting to Apple, but it just seems very obvious to me that comparison to retail falls apart because there are so many more retailers.

Yeah, although Walmart, don’t underestimate the size of Walmart, certainly in the US.  

Fair enough. The other world Logitech lives in is the world of standards. There’s USB for however much you’re going to play in the smart home. There’s Matter. There’s Bluetooth. Every time we do an episode on standards, we discover it’s intensely political and almost not technical in a very specific way. Has that come up for you — “Boy, we need to make sure that the next version of the USB standard can do all the things we want it to do”? Or are you saying, “We’re going to let the platforms figure that out”?

We’re really active in all of the industry forums and associations that talk about standards because it is really important for us, not just for the platforms. I would say the most important thing is that there is a standard because, when there isn’t, that just creates complexity and cost for everyone. We’re active and always trying to go for a standard.

I think we’ll have to go to some new standards as well. One of the things I’m quite proud of at Logitech is that we carbon-label our products with a really solid methodology. It shows that your mouse is 1.5 in terms of emissions and your keyboard is 15 and your video conference, I don’t know by heart, but it’s a lot more. What would be super interesting is if we could get to an industry standard for carbon labeling so that consumers and corporate consumers can make a choice on a product that has lower emissions. That’s one of the things we’re trying to work with some industry associations and groups on. But in general, standardization is important for the industry, and we’ll push that as hard as we can.

Did you open a door in some office at Logitech and find the people who have to work with the standards board and it’s just a group of sad lawyers?

They’re really exciting. They’re great.

I’m dying to know.

There’s not a lot of them. There’s like one, but they’re super active.

You’ve talked about climate and sustainability several times now. Let’s talk about it in the context of AI. A bunch of the big companies, in particular companies investing in data centers and foundation models, they’re blowing their climate goals out of the water because they’re spending so much more in energy to power these AI systems. Those things are obviously in tension. You’re in on AI. You have Options Plus. You have the buttons on the mice. Then you’re also talking about being sustainable. How are you managing that tension?

Clearly we’re not building LLMs ourselves, so the impact of our stuff is very modest. It’s on the edge. In the context of our total footprint, we don’t expect that to have a significant impact. Our impact sits in materials and components, in PCBs and plastics, and it sits in the circularity, or the lack thereof. Because we sell stuff, hardware, and that’s a huge part of our footprint. 

So that is not where I’m concerned, but clearly, as an industry, we should be super concerned about the fact that pretty much every player has goals to be carbon neutral by 2040 or 2050, but right now the numbers are only going up and up and up. That is very concerning. We’re a relatively small player, but I hope we can be a pioneer and show the way on taking real climate action rather than just buying offsets.

Some of your goals are using more than 70 percent recycled plastic in manufacturing. Can you get to 100 percent? Is that feasible?

We should be able to get very close. The first priority for us on our glide path to a 50 percent emissions reduction by 2030 is to expand what we already know how to do. I’m really proud that Logitech is already at 75 percent of products using recycled plastic. That is huge. Unilever, Nestlé, Procter & Gamble, they’re like 20 percent. This is huge on a large number of products every year. We also know what to do in terms of low-carbon aluminum, low-carbon some other things. We’ve got to scale what we already know how to do, and I think we can get very close to 100 percent.

Then we have to use renewable energy wherever we can because that is a big part of our footprint. And then third and fourth, we have to innovate and we have to drive circularity. The last one is probably the hardest innovation to come. PCBs are a big focus for innovation. They’re a big part of our footprint as well, and they’re very carbon-intensive. We know what the four pillars are: We have to scale. We have to use renewable energy. We have to innovate, and we have to go for circularity. And then I think we have a fighting chance to actually be minus 50 percent and again grow the business because that’s the tricky thing here and that’s what Google and Microsoft are really struggling with right now.

Can you quickly define circularity?

The forever mouse, and the forever mouse could be the mouse that you keep and we just send you software updates, but it could also be the mouse that you turn in at Best Buy and we get it back or Best Buy takes it back and refurbs and resells it, which is another business model. We’re starting to do that but not yet at the scale that we need to.

Let’s end on the forever mouse because I’m fascinated by this concept: the idea that you would have a mouse and you’d buy it once and then you’d maybe pay some fees for software upgrades or you’d trade it in and get a newer one, and that would be a recurring revenue source for you. That all depends on a vision of what the mouse software should do besides just move the cursor around. But whenever we do episodes with anything to do with AI, our audience is like, “We don’t want this.” In a very direct way, sometimes they’re like, “We don’t want this and we especially don’t want it here.”

We might want it when we want it. I might want to use generative fill in Photoshop on my terms, but I don’t need it to follow me around the computer. And even if you’re saying the climate impact is minimal, I certainly don’t want to feel like there’s any climate impact of using my mouse and expanding the range of places where you might go ask OpenAI for inference. That’s one problem. The second problem is you’re still competing with OpenAI and Google and Apple to be the primary interface for their backend services, right? You’re not training your own model.

The question for me is really twofold. It’s one:  is there a vision beyond “the software will do more for you” than just drive your mouse around? And the second part is: even if it can do more, can you realistically compete against the giants that have every incentive to make sure that you never look anywhere else?

On the second piece, this company has been a human-technology interface for its entire existence. And while the mouse built this house and maybe there won’t be mice forever — although I think there’ll be mice for a long time to come — we’ve always been that human-technology interface. There were always people who said, “Well, Google and Microsoft won’t want you to be.” In fact, they often come to us and say, “We want an interface.” So, that MX Ink, it’s not that we were pushing Meta really hard. It was Meta saying, “Oh, we’d love for you to do something like this,” and us saying, “Well, we think we can.”

I think the big players will continue to want to work with players like us who have the luxury of focus. For us, a $40 million idea is 1 percent growth. Whereas, for Microsoft or Google, that’s nothing. That luxury of focus is important, and I think we’ll continue to be a human-technology interface in that way. Should the mouse do more than just move the cursor? Absolutely. And it does that today, and I think similarly about being more productive with shortcuts to the large language models and all kinds of other things. The guy that I met at a barbecue over the weekend who has programmed 120 shortcuts on his mouse, that’s the kind of stuff that can extend human potential in ways that are healthier.

This idea — that Logitech sits at a machine-human interface — right now, it’s expressed in Options Plus. Your software that has AI in it is essentially prompt engineering, right? You’re guiding people through the process of making a prompt, which is, for better or worse, how we are all talking to AI right now.

Yeah, totally.

Is that it? Is that the vision? Is there a different vision? Is that just the stopping point right now?

No, I think we’re at the beginning of AI, and [with time], it will become multimodal and we won’t even need to build prompts because it will know what prompts we need. Things will evolve exactly how that will evolve. Who knows? But I think the human is going to be a limiting factor. Human hands, the human brain. I suspect we’ll still need human-technology interfaces. They may not look exactly like what Logitech sells today, but I think the future for human-technology interfaces is really, really bright.

The danger there is that’s also what Apple and Microsoft and Google see. I talked to Sundar Pichai and Satya Nadella, and they happily tell me that AI is a platform shift. And what they mean is that it’s an interface shift, that we’re going to get the phone out of your hand or you’re going to deal with something else that is not Apple’s phone. That’s very much what they mean.

What they’re talking about is, “Okay, you’re going to talk to the computer. It’s going to do stuff for you.” Or, “You’re going to issue a set of commands, and the computer will figure out how to do whatever task you want it to.” You can already see they’re getting there. You can see some of the demos of the concepts. Do you worry about that disintermediating Logitech?

Yeah, but again, there’s still going to be technology, whether that’s an AI button or something else. I think Logitech did a really fine job surviving the shift from PC to phone and still being a fabulous interface. I’m pretty sure that with the fabulous engineers and designers we have, we’ll also be an interface to whatever’s next.

Well, that’s a great place to end it. Hanneke, tell the people what you think is next for Logitech. You’ve been there for seven months. What’s the stuff you’re looking forward to now that you’ve figured it out?

We’ve got a great bunch of innovations coming up. I could tell you, but I’d have to kill you. [Laughs.] As we go toward the end of your holidays, I think we have a really bright fiscal year ahead, and then we’ll continue to extend human potential in work and play.

I love it. Well, the mouse built this house. This is amazing. Thank you so much for joining Decoder.

Alright, it is so nice to see you, Nilay.