Blog Post

Google TV Is Pricing Itself Out of the Market

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

We’ve known for a while that Google TV products would carry a premium over other comparable solutions on the market. But with yesterday’s introduction of the Logitech (s LOGI) Revue and a leak of pricing details on Sony (s SNE) TVs using the Google operating system this morning, it’s clear that Google TV will have a hard time finding adoption in an increasingly cost-conscious consumer market.

Yesterday we got our first look at the Logitech Revue set-stop box, the first Google (s GOOG) TV-powered offering to hit the market. At $299, the box is pricier than comparable broadband set-top offerings from Apple, (s AAPL) Roku and Boxee, which are priced at $99 or less for the first two and $199 for the latter device. And as Janko pointed out, it’s not a good solution for cord cutters anyway.

Sony isn’t set to announce its line of Google TV product until next week, but Sony Insider has published what it reports to be the size and pricing details of the CE manufacturer’s upcoming line of TVs using the Google operating system. The TVs range in size from 24″ to 46″, and while pricing info for the 24″ model is unavailable, the 32″ TV will reportedly sell for $1299.99, while the 40″ and 46″ versions will sell for $1499.99 and $1899.99, respectively. For many TV buyers, those prices will be difficult to overcome, particularly when there are a wide range of Internet connected TVs available with access to Netflix, Hulu Plus and other over-the-top content for much less.

The reason for the price premium is simple: Google TV requires an Intel Atom processor, 4 GB of flash memory and 1 GB of RAM dedicated RAM for the OS to work, which drives up the cost of materials. To maintain their margins, CE makers are adding that cost to the suggested retail price. The result is a product that is priced out of reach for most consumers.

Of course, many saw this coming: the difference in price has scared some manufacturers away entirely. Panasonic EVP Bob Perry, for instance, said earlier this year that his company would not be deploying Google TV-powered products, largely due to the costs involved with building them.

Despite some initial enthusiasm for Google TV, it will be difficult for products running the OS to receive mass consumer adoption at the prices that they’re expected to sell for. Which is one reason why we think the first generation of Google TV products is bound to be a disappointment.

Related content on GigaOM Pro: (sub req’d)

35 Responses to “Google TV Is Pricing Itself Out of the Market”

  1. People will throw $500-$830 at an iPad, for which they don’t really have a use. (ebooks, Scrabble?) Why are you so sure people won’t pay for a TV computer done right?

  2. Brrrrrr

    I think Google is trying to present a much too all-inclusive box, like the Swiss army knife of all set top boxes. In the pursuit of this goal they have produced an oversized, overpriced entry. Along the way to justifying the hefty cash outlay needed to Google tv, much is made of Google TV’s web browsing abilities. Sorry Google Guys, television web browsing is old news.
    WebTv has been around for 15 years ( You might take note of the huge success WebTV has been ( tongue-in-cheek ))! And all the other things Google TV can do… Overwhelming! … But, then, so is the price.

  3. “Cord cutters” just don’t get it. Techno-utopian nonsense.

    No matter what TV you decide to get, the cable companies and the broadcasters will catch up with you, and your wallet.

    Have fun with these toys now, because when they take off the cable companies will strangle your bandwidth and readjust your Internet and TV bill accordingly.

  4. Kaliman

    TV is changing and the old models of distribution are dead or dying. If you have cable or satellite you must be aware how backwards the user interfaces is. Why are channels in numeric order? If I knew the the number i’d just punch it in. Searching for programing based on what you what is difficult and backwards. Goggle TV is going to be a game changer and this is just the start. 299 is retail the street price will be lower.

  5. onecallednick

    What’s the point at this price? If you’re buying nettop internals, why not get a nettop? Ion nettops are the same price, and you get a real computer with a full OS, and a lot more than 4 GB of storage.
    Here’s one with a dual core atom, 2gb ram, 250GB HDD, Windows 7, and Nvidia Ion for $340 shipped.

  6. What most concerns me is the price premium Sony is demanding for its TV systems with Google TV integrated. As Google TV the software platform is developed to maturity, its hardware requirements will likely change, thus potentially making TV’s with Google TV integrated obsolete and unable to enjoy future functionality. This is especially true when one considers that the useful life cycle of a consumer grade TV is several years longer than the hardware requirements of continually advancing software platforms.

    Sony isn’t doing anything to entice anyone other than the earliest adopters to buy their Google TV integrated televisions. Again…this is not a good way to advance this fledgling product.

  7. portlander380

    Please! You people are such simpletons. The Logitech Google TV box is expensive because it contains a lot more hardware.

    Can Apple TV work with a satellite DVR?
    Can Apple TV output 1080p?
    Does Apple TV come with a full wireless keyboard and not a 2 button remote?
    Does Apple TV have a web browser?
    Can you control your Apple TV from your phone?
    The list goes on and on.

    Additional hardware and functionality costs money. But I don’t expect you to understand that.

    • You’re right. When you break it down by button, Google TV is a much better deal at $6/remote button vs Apple TV at $14/remote button.

      The idea that you would regularly need a keyboard to control your TV viewing experience is why gTV will have a hard time going mainstream.

    • You’re listing off a bunch of things that most people neither want nor need.

      The sort of people who are going to be able to make full use of Google TV’s extra features are the same ones who are likely to already have multiple computing devices which already do everything Google TV’s extra features will do (and do them much better).

      Google TV is like paying an extra $200 to add a cup holder to a baby stroller. Sure, you might make use of that, but how often do you really need a cup holder when you’re pushing around a stroller? Likewise, when I want to watch TV, I want to watch TV, and Google should focus on that and trim the excess. I can browse the web on my laptop or phone while watching TV, and those also provide much better apps. Putting those sort of things on your TV would amuse you for about 5 minutes, and then you’d want to go back to using it for what TV’s are made for: watching shows/movies.

      Also, considering that the Apple TV already runs on a modified version of the iOS, you can bet that full access to the millions of apps on the App Store is just around the corner. And yes, you actually can use an iPhone/iPad/iTouch to control it.

      Anyway, your elitist attitude just made the author’s point: As it stands, Google TV will only appeal to a tiny niche market.

  8. By “4 GB of dedicated RAM” I think you mean flash memory, not RAM. The article you linked to mentions a requirement of 4GB of flash memory, and 1GB of RAM.

  9. My jaw dropped when I saw the price. Indeed, it’s Google and I love Google and everything they’ve connected and done thus far. But as others have commented, $299 is way too much, especially coming from a company that offers 95% of it’s products for free! I thought Google woke up, but I was wrong. If it were competitively priced with the Apple or Boxee, I’d be all over it in a heartbeat. In fact, if it were $149 I would have pre-ordered one already. $300 is too much. I’m better off buying a cheap Xbox and grabbing a live subscription for $50/year.

    • How are you better off buying an Xbox and grabbing a live subscription? That’s $250. That’s the same price once you have to buy a single accessory and cable.

  10. Actually it is cheap as i don’t need to buy a new PC when i could have the Logitech Revue capabilities, the Gadget of the Year for me with HD Video calling/Mail , full Browsing and Media control and Games and Apps and many more.

    it is also got a ~$100 Keyboard/remote bundled
    while other a toys when compared to Logitech device and Google TV platform

  11. I knew it! I knew that Intel is what’s creating the high costs. For 2 reasons actually. Intel’s chips are more expensive than ARM, and Intel is greedy and want high profits for their chips. They are usually making very low profit on Atom, not as a percentage of cost, but as a total profit amount, especially when compared to their PC chips.

    Google partnering with Intel was one of their dumbest strategic decisions ever – bigger even than even than the partnership with Adobe (ok maybe that one helped them against Apple, but I believe it also slowed down HTML5 adoption and lowered the expectations for HTML5).

    If ARM was good enough for Apple TV, then so would’ve been a Tegra 2 or any other ARM chip of that level, for a much lower price.

    When the ARM version of Google TV appears next year, we should be able to see even $100 Google TV boxes. There’s no reason why that wouldn’t be possible.

    • You are exactly right. Google TV can work on much cheaper ARM Powered devices. And the HDMI in/out and IR blaster can easily be added to ARM Cortex A9 based processor SoC platform. Yes, for now Logitech, Sony and Intel have an exclusive right to implement Google TV before Christmas, and I think those devices will be popular even with a $300 price point. But I also think early next year, as Google TV 1.0 will be open sourced, I also think we will see Google announce support for a whole range of ARM Cortex A9 processors, all of which also really start to be released around that time. As for a best Google TV experience, [email protected] with High Profile H264 support is preferable and decent graphics and processing is required for a smooth UI and overlayed features to happen on top of TV contents. Using ARM, the Google TV boxes will be sold for $99 starting early next year and those will beat Apple TV on features by a huge lot.

      Intel won’t be so happy about that, because they are desperate to get back in the Android game and have some kind of exclusivity with it, but it will not last and they know it.

      • Absolutely, but I don’t think they overlooked it. Probably I’m overestimating them but as much as I like google products, I’d better think this was a deliberate move as a part of some long-term strategy.
        Despite high costs, I am sure the quality of the hardware is worth it (Sony!), and google fans will buy it, submit a really constructive feedback, and then early 2011 we’ll get a cheaper and better GoogleTV. At least I hope so.

  12. robocop

    i completely agree with you. the prices are way too much for what you’re getting. On top of that, IF you don’t have cable tv with DVR, you will just be limited to whatever online content is available.