Logitech saw more returns than sales of its Google TV-powered Revue companion box, whose price has just been slashed to $99 from $249.
The bet on Google TV has cost Logitech dearly, as the
peripheral maker fired its CEO after returns of the Google TV-powered Revue box
outstripped its sales.
Logitech lost $30 million for the first quarter
sales of its digital home products, including the Revue box and its corresponding
remote control keyboards, fell 53 percent, resulting in a $34 million charge.
To improve matters, Logitech
slashed the price of its Revue companion box from $249 to $99 to accelerate adoption
of Google TV by "removing price as a barrier to broad consumer acceptance."
That's one-third of the box's launch price last October,
when the Revue debuted and quickly earned complaints for serving a buggy Google
Google TV uses Google's (NASDAQ:GOOG) Android operating system and
Chrome Web browser to deliver users Netflix, Amazon Instant Video and other
applications through televisions.
Worse than the cost-cutting was this nugget about the
Logitech's Q1 prepared remarks
: "Sales of Logitech Revue were slightly
negative during the quarter, as returns of the product were higher than the
very modest sales."
New Logitech President and CEO Guerrino De Luca, who
replaced CEO Gerald Quindlen, acknowledged the weakness in the Revue sales
"We launched Revue with the expectation that it would
generate significant sales growth in spite of a relatively high price point and
the newness of both the smart TV category and the underlying platform," said
De Luca. "In hindsight, there are number of things we should have done
Still, neither Logitech nor Google are giving up on Google
TV. Both partners believe the platform will be successful for the long haul
"We expect the lower price, particularly when
combined with the upcoming enhancements to the Google TV platform, including
the availability of an apps marketplace, should provide the consumer with a
compelling value proposition," Logitech said in its Q1 earnings call.
The enhancements Logitech referred to include the upgrade
of Google TV from Android 2.1 to Google's Android 3.1 "Honeycomb"
operating system, which will sport a full version of Chrome and applications
from Google's Android Market. See a glimpse of the new software here
A Google spokesperson told eWEEK said that Honeycomb upgrade
and the availability of the Android Market on Google TV is on track for
a summer launch.
"We launched Google TV with a firm belief that
bringing the power of the Web into the living room will significantly enhance
the television experience," Google told eWEEK. "We believe in this
now more than ever. It's still early days for smart TVs, and we're investing to
continue to bring innovation and progress for our partners and users."
At some point, Google also expects to launch an SDK to
let any third-party Android developer write apps for Honeycomb. Google declined
to say when that would be available.
The smart hunch is Google is waiting on the SDK to see
how consumers and major Web publishing partners alike respond to Honeycomb,
which was intended for larger screens, on Google TV.