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11/11/2011
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Logitech Concedes Mistakes Marketing Google TV Hardware

Device maker puts part of the blame on incomplete Google TV software, but Logitech says it still sees promise in the product.

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Computer peripheral maker Logitech said that the underwhelming launch of its Google TV set-top box, the Logitech Revue, cost the company dearly, laying some of the blame on Google's incomplete software.

In a conference call for Logitech's Analyst & Investor Day, CEO Guerrino De Luca attributed a loss of $100 million in operating income to several factors, most notably problems with Logitech's European distributors and its implementation and strategy for selling the Logitech Revue.

De Luca, who took over when former CEO Gerald Quindlen stepped down in July following weak fiscal first-quarter 2012 earnings, said that the Revue was launched with software that wasn't complete and wasn't tuned to what consumers wanted.

Part of what consumers wanted was a better deal: When Logitech reduced the price of the Reveue to $99 in July, it sold well.

"We expected everybody to line up for Christmas and buy these boxes at $300," said De Luca. "That was a big mistake." He also made it clear he still believes in Google TV as a concept, albeit one that needs further refinement.

[ Find out more about Google's plans for Google TV. Read Google TV Tries Again, Adds Android App Suppport. ]

Google maintains it is committed to Google TV, too. "Logitech has been a good partner in the early days of Google TV, and the feedback from Revue users has been very important for the design of the new version of Google TV announced two weeks ago," a Google spokesperson said via email. "We're excited about new partnerships with new chipset vendors and new hardware manufacturers, which we will announce at a later date. These partnerships will help power the next generation of Google TV devices in 2012."

Logitech might remain one of Google's partners, possibly as a maker of Google TV peripherals, but De Luca said the company has no plans to build another Revue box.

Google has taken steps to shore up the Android platform and make it more stable, an effort consistent with CEO Larry Page's focus on putting "more wood behind fewer arrows." With the arrival of Android 4.0 (code-named Ice Cream Sandwich), a release that unified the Honeycomb tablet version of Android with the version tuned for mobile devices, Logitech and other Google partners can look forward to a more functional operating system for their hardware.

But Google TV's software was the least of the things that hindered the Revue and Logitech. Google TV misfired at launch because it over-promised and under-delivered. This was largely the result of marketing failure. Consumers saw what they wished for: a way to get quality content without paying for it through a cable TV subscription. And Hollywood saw what it feared: a device that would provide over the Web what viewers paid for on TV. Google TV was never intended to be either of those things; it's supposed to make TV, the Web, and apps available in one harmonious ecosystem. And it might well manage that feat in subsequent iterations, particularly now that Google appears likely to gain the hardware design competency of Motorola Mobility.

The most significant mistake Logitech made, suggested De Luca, was not paying enough attention to the company's product portfolio. "We thought that quantity could replace quality," he said.

The company, De Luca conceded, failed to recognize Apple's "ideological leadership in the PC space." Logitech, he said, looked to the PC market to make its products because it was larger, and failed to appreciate the standards of design and usability that Apple has trained its customers to expect.

"If your Mac product feels like a PC product, it is junk," he said, noting that the Mac is a religion and the PC is not.

Going forward, De Luca said that Logitech will design products as if they were intended for the more discerning Mac market and bring them to the PC market with "a hint of Mac," because "you're a closet Mac desirer that either doesn't know about it or knows about it but can't do anything with it."

If Apple really does hold that much sway, it will be interesting to see what happens to Google TV when Apple unveils the television it is said to be working on (not to be confused with Apple's set-top box, Apple TV).

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