An unexpectedly buoyant business thanks to the pandemic has finally reached its ceiling: webcams

Whoever writes this bought his last webcam —a Logitech C920 HD, to be more specific— in 2021, with the winds of the pandemic still raging. The needs derived from teleworking encouraged me to retire once and for all the model I used until then, also from Logitech, but much older, with fewer benefits, and whose banishment to the storage room I had been postponing for some time. Mine is not a special case. Not a rarity. Whether it was because of the teleworking boom, because we spent more time at home or a greater availability of money, there were many of us who decided to fill the cart with technological gadgets.

The “problem” is that as COVID-19 subsides, that indefectible law that everything that goes up ends up coming down is fulfilled. And that is already clearly noticeable in the balance sheets of the companies. And, of course, webcam sales.

What does the Logitech data say? The last balance sheet of the firm Switzerland, a benchmark in peripherals, is quite illustrative of how demand is evolving. The results for the last quarter of 2022 show that its sales fell by 22% compared to the same quarter of the previous fiscal year.

Their tables show that “punctured” the marketing of audio and wearables (-34%), portable speakers (32%), keyboards (22%) and devices such as mice (14%). The biggest hit of all, however, was suffered by PC webcams, which fell by 49% during the same period. In total, considering the last nine months of 2022, Logitech experienced a 16% decline in net sales year-over-year, which also includes, precise Ars Technicathe income derived from services of streaming.

And where do we come from? From quite a different setting. In May, for example, Logitech announced that throughout the fiscal year that was then closing — from April 2021 to March 2022 — it had registered record sales. In April 2021, its managers also spoke of a skyrocketing demand, with an increase in year-on-year sales of 76%. Those were the months of the pandemic and the confinements and the scenario was different from the one we are now facing, marked, Logitech itself acknowledges, by inflation and a cut in spending.

Does it only happen to Logitech? Absolutely. The “lean cow” period also affects other companies in the sector, dedicated both to the marketing of peripherals and other activities. Nor was it the only one that saw its demand rise during the pandemic, which led some companies to endow themselves with resources that are now excessive and weigh on their financial balance sheets.

Amazon, for example, has announced the layoff of 18,000 workers, at Microsoft there is talk of 10,000, at IBM 3,900 and at Spotify 600. Corsair, another large manufacturer of peripherals, like Logitech, left equally interesting data in November: its revenues in the segment amounted to $96.8 million, above the 89 million of the previous quarter. The increase is noticeable, but it is far from what was noted during the previous exercises.

The challenge of convincing customers. What slide in Ars Technicaone of the great challenges of the sector involves mobilizing its customers after the wave of purchases in recent years, convincing them that the products they can offer them today really make a difference compared to what they bought in 2020 or 2021.

The challenge is not easy, of course. The demand for webcams in the early stages of the pandemic —which Yahoo Finance came to encrypt up 179% year-over-year—was so steep that even alerted of the risk of shortage. Now the scenario is very different, marked by the general decline in demand and also the end of the expansion of teleworking or its direct decline.

Beyond the webcams. As Logitech’s own data reflects, the trend isn’t exclusive to webcams. Recently Gartner calculated that global PC shipments had totaled 65.3 million units during the fourth quarter of 2022, which represents a 28.5% drop compared to the fourth quarter of 2021. The setback, the consultancy abounds, marks “the largest quarterly decrease in shipments” since studying the PC market in the mid-90s. On an annual basis the decrease was 16.2% compared to 2021.

Cover image: Emiliano Cicero (Unsplash)