After serious launch missteps and all signs pointing to poor consumer adoption, Google TV has a tough road ahead — and now hardware partner Logitech isn’t making things any easier for Google’s smart TV software platform.
Logitech CEO Guerrino De Luca threw Google under the bus in a conference call with analysts and investors on Thursday, first reported by The Verge. De Luca cited the failed launch of Google TV as the primary reason why Logitech had disappointing Q1 financials; the company reported nearly $30 million in losses for the quarter. In part, Google TV contributed significantly to losses of “Well over $100 million in operating profits.”
As a result, Logitech is jumping ship. De Luca said the company has “no plans to introduce another box to replace Revue,” and will let its existing inventory run down to zero. It’s massive damage control for “[executing] a full scale launch with a beta product [which] cost us dearly,” as De Luca put it.
In 2010, the company bet big on Google TV, manufacturing way more devices than it should have. “We expected everybody to line up for Christmas and buy these boxes [at] $300,” De Luca said. “That was a big mistake.”
A costly mistake, at that. Then CEO Gerald P. Quindlen was booted, the company missed its Q1 estimate by a mile, and as a result, Logitech slashed the Revue’s price to one third of what it initially asked. Painfully, more devices were returned in the first quarter than Logitech was even able to sell.
Despite its awfully rocky start, Google is currently ramping up for a second go at its smart TV software package. Last month, Google launched version two of Google TV, complete with a revamped user interface, Android Market app access, improved content discovery mechanisms, and more tightly integrated YouTube functionality. It’s what VP of product management Mario Queiroz considers the second leg of “a marathon project, [rather than] a sprint.”
A good portion of Google’s so-called marathon plan involves remedying big mistakes of the past, including streamlining what many saw as complicated peripheral hardware.
“They tried to make the Google TV experience too much like a computer,” Forrester analyst James McQuivey said in an interview. “Companies like Logitech invested in these complicated peripherals, and they’re too complex for people.”
The first generation of Google TV peripherals were indeed a mish-mash of combined keyboard/remote frankenware, a reminder of the failed Web TV controllers first introduced in the mid-90s. “It doesn’t make any sense to add another remote to people’s lives,” McQuivey said.
Google has said it’s working with its partners on redesigning the controller hardware, and will offer a streamlined, less-complex version of a TV controller in the future. The partner working on the project is ostensibly Sony, the other major manufacturer to offer a Google TV set-top box.
Sony did not respond to requests for comment.
But Google may not have all its eggs in Sony’s basket in the wake of Logitech’s pull-out. Google is rumored to be in talks with South Korean electronics conglomerate LG on producing its own version of a Google TV set-top box, according to sources cited by Bloomberg.
An LG spokeswoman did not respond to a request for comment.
To be even less dependent on the remote control hardware of partner manufacturers, however, Google could focus on another market segment in which it already has momentum: smartphones.
“Google hasn’t paid attention to the fact that you don’t even need another remote when you have an Android phone,” McQuivey said. “It might be the case that Logitech never needs to make another remote, and Google TV can still be a successful product.”
Google is also beefing up on the content side of its TV operation, recently announcing a renewed deal with Disney Interactive to bring more original content to a co-branded YouTube channel. And recently Google announced it would bring over 100 different genre-specific channels to YouTube, boosting efforts to bring original content to the streaming video platform. Beefing up YouTube is especially relevant to the most recent release of Google TV, which features tighter YouTube integration and a better-performing YouTube app.
Further, Google could be in the early stages of creating its own “triple play”-style cable TV service.
Fortunately, existing Logitech box owners won’t be left out in the cold. “Logitech users can still expect to get a V2 update within the coming weeks,” a Google spokesperson told us. Currently, Google TV version 2 is rolling out to Sony boxes.
Coping with the backlash of De Luca’s harsh comments, Logitech doesn’t want its existing Revue owners to feel abandoned. “…Logitech remains committed to all of its Logitech Revue customers and will continue to provide them with customer support under our warranty policy,” a Logitech spokeswoman told Wired.com in a statement. The company also plans to continue supporting other Revue peripherals, including its TV camera and mini-keyboard.