A lot of times, companies fail by not embracing new technologies quickly enough, but Logitech’s Google TV (s GOOG) debacle might be just the opposite: The company bet aggressively on technology that consumers weren’t quite ready for. That’s the takeaway from comments made by Logitech (s LOGI) CEO Guerrino De Luca at the company’s Analyst and Investor Day.
A mistake of implementation
While admitting that the Logitech Google TV was a mistake, De Luca was clear it wasn’t a mistake of intention or strategy, but one of implementation. In his comments, De Luca reiterated the belief that “Google TV or a child of Google TV or the grandchild of Google TV will happen,” and that “the integration of television and Internet is inevitable.” In other words, it wasn’t a question of whether or not the convergence of TV and the Internet will come to be, but how soon it would occur.
“The idea that it would happen overnight in Christmas 2010 was very misguided and that also cost us dearly,” he said.
Of course, Logitech isn’t the only company to suffer from being ahead of its time on a certain product or strategic initiative. Just think of Apple’s Newton tablet (s AAPL) or the tablet PCs that Microsoft showed off (s MSFT) long before the iPad changed the computing industry. Heck, the Logitech Revue and the first iteration of Google TV are far from the first failed efforts at interactive television: Fifteen years ago, WebTV launched to bring the Internet to TV.
For Logitech, the expectation that consumers were finally ready for this brand new experience was misguided. “It’s always the case people will tend to overestimate the short term and underestimate the long term,” De Luca said
Google TV not complete at launch
It’s not just that the timing wasn’t right, but also that the Google TV software wasn’t quite ready for primetime. De Luca stopped short of calling the initial Google TV operating system “beta software,” but acknowledged that it wasn’t complete and not “tuned to what the consumers want at the living room.”
One big failure was the way in which users interacted with the Google TV interface: a problem that wasn’t helped by the clunky input devices that CE manufacturers offered with products that supported the TV OS. In Logitech’s case, that was shipping the Revue with a keyboard and trackpad that made navigating the TV tricky. And Sony, (s SNE) which had its own line of Google TV products, shipped with a monstrosity of a remote that was more confusing than useful.
But the Internet-enabled content also wasn’t there at launch. While the introduction of a Flash-enabled (s adbe) web browser built into Google TV initially gave some users hope that they’d now be able to watch all the same online video content on their TV that they enjoyed on the desktop, the reality was that premium content owners quickly moved to block access to their videos on the device.
The price wasn’t right
Finally, Logitech overestimated the price consumers would be willing to pay for the Google TV experience. It wasn’t alone in this regard; Sony TV and Blu-ray units with Google TV were priced at a premium as well. However, asking consumers to pay $300 for an Internet-enabled set-top box when Apple TV and Roku sold for $99 was a non-starter. DeLuca said that heavily discounted units are selling now, but they’re also selling at a loss: Logitech’s cost of materials for the Revue is well above the $99 that it’s now asking for the device.
With a $100 million loss attributed mostly to its mistake with Google TV, Logitech is in no position to double down on the platform. While it hasn’t given up on supporting future versions of Google TV, De Luca said he’s optimistic that the operating system will catch on, but isn’t willing to bet the company on it. For now, that means running out inventory on its existing box and taking a wait-and-see approach going forward.