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Logitech (LOGI) Introduces New Keyboard Case for iPad Pro

Zacks Equity Research

Logitech LOGI recently introduced backlit keyboard case built for the latest iPad Pro devices launched by Apple AAPL.

The Logitech Slim Folio Pro is designed to complement the 11 inch and 12.9 inch iPad Pros, and offers a laptop-like typing experience. Few of iOS-specific shortcuts are also present on the case.

It boasts light weight and a magnetic latch to keep the case securely closed when the iPad is not in use, thus protecting the device from scratches and spills.

Notably, the battery of the new keyboard is designed to run upto three months on a single charge, assuming a two-hour per day usage. This feature differs from its previous model of the Slim Folio, which has replaceable coin battery with battery life of four years.

The Slim Folio Pro, which is priced at $119.99 for the 11-inch iPad Pro variant and $129.99for the 12.9-inch (3rd Generation) iPad Pro variant, is expected to hit the shelves this month. It will be available at Logitech.com and select retail stores.

How Different is it From Apple’s Smart Keyboard Folio?

Last year, alongside the new iPad Pros, Apple launched its own keyboard case— the Smart Keyboard Folio.

Apple’s keyboard can be used at two angles, whereas the Slim Folio Pro appears to only support one angle while typing.

Moreover, the Slim Folio Pro, with backlit keys, connects over Bluetooth LE instead of the iPad’s Smart Connector, meaning that the keyboard needs to be charged separately. However, this feature helps the keyboard run without draining the iPad’s battery.

Tablet & Other Accessories — A Key Catalyst

Logitech is intending to tap the high potential market for accessories by pursuing innovation and expanding its product lines. Over the past year, Logitech has introduced a number of offerings to grab a greater market share. Growing adoption of new mobile platforms in both mature and emerging markets are fueling demand for Logitech’s peripherals and accessories.

During fiscal 2018, revenues from Tablet & Other Accessories, which is part of its Creativity and Productivity segment, increased 40% year over year. This was primarily driven by the introduction of Slim Folio, Slim Combo keyboard cases and Rugged Combo keyboard case,

Further, the Tablet and Other Accessories business registered year-over-year improvement of 34% in the third quarter of fiscal 2019, the highest among the four sub-segments of the Creativity and Productivity business.

Strong performance of the existing products like the Slim Folio and growing momentum in new products like its digital pencil for the 9.7-inch iPad, Crayon are positives. Notably, Slim Folio is reportedly the best-selling tablet accessory for Logitech.

Although there are few products built for select brands like Samsung and other Android tablets, most of the products of Logitech’s Tablet & Other Accessories category are designed for iPads. Thus, this category is largely dependent on the market for iPads.

However, even though it is unlikely that Apple will sell as many iPads as when they were newly launched, the market for the device is believed to have stabilized, with Apple selling near 10 million iPads every quarter with slight fluctuations. This bodes well for Logitech as it spells consistent revenues for its Tablet & Other Accessories business.

Logitech International S.A. Revenue (TTM)

Logitech International S.A. Revenue (TTM) | Logitech International S.A. Quote

Zacks Rank & Other Key Picks

Logitech currently carries a Zacks Rank #2 (Buy).

A couple of other top-ranked stocks in the same sector are Verint Systems Inc. VRNT and Cadence Design Systems, Inc. CDNS, both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rankstocks here.

Long-term earnings growth for Verint and Cadence is projected to be 11% and 12%, respectively.

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