Friday, November 11, 2011

Logitech Quitting GoogleTV

It’s been widely accepted that GoogleTV’s launch was premature and much less than successful.  So this latest bit of news won’t surprise many of you – Logitech’s CEO Guerrino De Luca announced his company is dropping GoogleTV for the time being.  Here’s an excerpt from his talk at the Logitech “Analyst and Investor Day”

He begins talking about GoogleTV with the admission that Logitech had extremely high expectations in terms of sales:

“…I would definitely want to have Google establish Google TV, but with a significantly smaller and more prudent approach. It’s always the case people will tend to overestimate the short-term and underestimate the long-term.

More on Logitech’s (and Google’s) over-reaching expectation that Television and the internet integration would be accepted (and work) overnight at launch:

Google TV or a child of Google TV or the grandchild of Google TV will happen. The integration of television in Internet is inevitable. But the idea that it would happen overnight in Christmas 2010 was very misguided and that also caused us dearly. As you know, we dramatically reduced the price of the box to what we thought the consumers valued it and actually doing fine.

Here he goes on to discuss how Logitech misinterpreted consumer behavior.  And how that misinterpretation caused Logitech to make a $100 Million mistake in operating profits on the GoogleTV/Revue:

Our third mistake is actually of a different nature and it’s probably more significant. We had paid much less attention to our product portfolio than we should have. Over the course of the last two or three years we just, we thought that quantity could replace quality and we just did not fully understand what the consumer behavior is at the point of sale, and how to create exciting proposition that made somebody take it and roll up and give us demand. So also because we weren’t focusing on certain things particularly in the living room and Google TV there was an underlying opportunity out there and which we did not focus in other things were happening and we are closer and more real and more existing to when I’ve always been a fan of going to something that already exists, I suppose to completely getting out into the stratosphere of what might happen.”

If you’re wanting to pick up a Logitech Revue watch for even more price drops as Logitech is working to sell the remainder of their inventory by March 2012 (end of their fiscal year 2012) if not sooner:

“We brought contracts to match their preview they mentioned about substantial price drop. The products are selling we believe that we will be out of their inventory by the end of fiscal ’12 and that’s kind of a cautious statement, we may be out of inventory even somewhat sooner than that date. We have no plan to build another box.”

I understand Microsoft and Google not wanting to make the hardware for HTPC/ConnectedTV devices.  The problem is it’s a huge risk for a consumer electronics company to be that hardware maker for an unproven, alpha/beta product.  Google needs only to look at Microsoft’s extender debacle to see what direction they ended up with.  Microsoft’s only extender device is their very own XBox 360.  The first key to making this connectedTV platform succeed and be widely adopted is to produce your own hardware where you control the firmware updates and the hardware.  Make it work extremely well for the consumer and then your platform it’s built on will succeed.  Google can look to their newly purchased SageTV to see the success of this model on a much smaller scale.

via theVerge and SeekingAlpha