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 (GOOG) 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), it put out its first hardware in October 2010.
But the product has languished due to several factors.
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 report [PDF].
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 units.
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.
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