Rumors are circulating that Microsoft Corp. is on the verge of launching a takeover bid for Swiss-based computer peripherals maker Logitech International SA.

While neither vendor would discuss any industry speculation on the subject, the thought of combining the world's largest software maker with the planet's leading vendor of computer mice and other peripheral devices would certainly deepen Microsoft's hardware product portfolio.

"The future of computing is just as much about consumers as it is about business," said Warren Shiau, associate partner, lead analyst, IT research, The Strategic Counsel. "iPod is all the proof of that anyone will ever need. Microsoft is actually into little gadgets and hardware in a big way already -- it just slips peoples' notice a lot because its software side is so big."

Shiau said he wouldn't expect any big impact on the channel or its customers. Perhaps Microsoft could squeeze a bit more from the channel and its suppliers because it would be a bigger player if it bought Logitech.

"But peripherals like mice/keyboards, etc., are small margin anyway. I'm having a hard time imagining it's critical for Microsoft to corner the mouse market, so my guess is this would be about some interesting tech Logitech has somewhere else," he remarked. "The stuff that would go into building a state-of-the-art force-feedback steering wheel for driving games, at $100 a pop, could be pretty interesting, for instance. Or maybe Logitech has some prime manufacturing relationships. I'm sure there's some logic to it somewhere -- pardon the pun."
Rob Enderle, principal analyst for The Enderle Group, said if Microsoft was serious about acquiring Logitech, it would make perfect sense to him since Logitech -- one of the smaller companies to compete successfully with Microsoft in its chosen market -- has repeatedly beaten the pants off Microsoft in the space.

Moreover, Enderle speculated Microsoft might be keen on Logitech's line of iPod accessories.

"Logitech is preeminent in accessories whereas Microsoft was once the leader," he said.

"Logitech has had more success in this space over the last decade than Microsoft has, and an acquisition would allow Microsoft to re-establish themselves in this market . . . Logitech has a nice line of iPod accessories so maybe this is the critical path for them.

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