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, as 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 TV service.
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 Revue from 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 execution.
“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 differently.”
Still, neither Logitech nor Google are giving up on Google TV. Both partners believe the platform will be successful for the long haul over time.
“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.