Google TV Is Pricing Itself Out of the Market

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.

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