updated 10:10 am EDT, Thu July 28, 2011
Logitech loses 45m on Revue price cut, CEO exits
Logitech revealed ongoing struggles for the current Google TV platform with a price drop on the Revue. The set-top box will now cost $99, half as much as before. The company also admitted it had to take a loss to support the price as $34 million of its $45 million operating loss accounted for the "cost of goods" from selling below plans.
Cutting the price was needed to "remove price as a barrier to broad customer acceptance," the company said. It revealed that there had been more returns than sales and implied many didn't believe the box was worth the higher prices.
The price slash, along with near-flat revenue year-over-year and poor performance in the EMEA (Europe, Middle East, and Africa) region, led CEO Gerald Quinlen to step down. Chairman and former chief Guerrino De Luca would return to the CEO position until Logitech found a more permanent replacement.
Google TV as a whole is currently in a limbo state while Google coordinates a revival with Android 3.1 and extra manufacturers in the fall. The platform as a whole has nonetheless fallen well short of expectations. In winter, the company shipped just $5 million in Revue hardware, less than a third of what it had anticipated. It ended up slashing the price of the Revue from $300 to $250 and later $200.
Neither Google nor partners Logitech and Sony have directly explained the lack of sales. Some of it may have come from Apple TV competition, where the $99 price made Google TV appear expensive. The platform's dependence on Flash-based web video also negated much of its advantage, as most major networks blocked it and left it with virtually no mainstream content.