Apple, Inc.'s (AAPL) first
generation Apple TV was infamous as the only high profile modern Apple hardware
product to flat
out fail to catch on. Now Apple's smartphone rival Google Inc.'s
own television offering is running into problems of its own.
Unlike Apple TV, Google TV tried to do much more.
Where as Apple TV acted essentially as a streaming video and media
storage device alone, Google added a smattering of apps and internet access.
Partnering with Sony Corp. (6758) and Logitech
International SA (LOGI),
out its first hardware in October 2010.
But the product has languished due to several
First, it was a rush job and Google did take the
time to implement third-party apps. Second, the quick release led to an
interface that while almost deep and intuitive suffered
from frustrating bugs.
Last, but not least, late last year Google waged a high
profile war with network television companies. Afraid that
customers would abandon more lucrative broadcast television to watch their
shows exclusively online, the broadcasters figured out a way to block
Google TV sets from accessing their TV episodes online.
This was a seemingly baffling stance -- after all
the broadcasters put them there in the first place. But most agree it was
a move made out of fear -- online advertising still sells for less than
broadcast ads during a primetime TV show.
And it worked. Google was unable to restore
access or talk TV broadcasters into re-allowing its devices.
Faced with essentially a crippled system with no
third-party apps, few TV shows, and a buggy interface, Google TV was
unsurprisingly met with disinterest or even scorn from many customers.
But the depth of how far Google TV sunk is just
now becoming apparent. Logitech's set-top Google TV box Revue and its
peripherals only earned $5M USD in the first three months of the year,
according to its just released earnings
Taking into consideration that the product retails
for $299, which would mean approximately 16,700 sales, if all the revenue was
towards the box exclusively. Factoring in that peripheral sales provided
part of that revenue, it's likely that actual sales were closer to 15,000
Logitech had sold $22M USD worth of Google TV
product in the last three months of last year (approximately 70k units) and
hoped to sell $18M USD in this quarter.
Instead it missed its target by 70 percent and saw
inventory of Revues soar 28 percent. That comes despite a 19 percent increase
in the marketing budget to try to push Google TV.
As a result of the failure of Google TV, Logitech,
much like Apple, is keeping its product, but transitioning it to life support.
It is scaling back its advertising and production. It claims[PDF]
it is "fully prepared to re-accelerate those activities at the appropriate
time." And CEO Gerald P. Quindlen loyally stated that his company
remains "enthusiastic about Google TV."
Google's last-ditch effort to save the floundering
product may come next month at the Google I/O conference for
developers. Google's equivalent of Apple's Worldwide Developers Conference(WWDC),
the I/O Conference is often a platform for high profile Android news.
Reportedly Google will air new Google TV products, this time with a
streamlined interface and access to third party apps (in effect transforming
the products into low-end gaming consoles of sorts, for one thing).
It remains to be seen if this latest bid succeeds
where past efforts by Google and Apple have failed.
quote: First, it was a rush job and Google did take the time to implement third-party apps.
quote: Faced essentially a crippled system with no third-party apps,