Colin Dixon, Senior Partner, Advisory
November 18, 2011
Logitech recently pulled the ill-fated Revue Google TV set-top box after losing $100M on the product. During an analyst and investor meeting in New York, Guerrino De Luca, CEO of Logitech, pointed the finger of blame squarely at Google TV saying that, "The integration of television and the Internet is inevitable, but the idea that it would happen overnight in Christmas 2010 was very misguided."
It seems that Mr. De Luca has a selective memory. For one, Logitech introduced the Revue at a price of $299 when other Internet STBs, such as Roku, were selling for well south of $100. Second, the justification for the high price had little to do with Google TV, but rather the inclusion of Logitech's Harmony remote functionality. (The Harmony line of remotes allows users to control multiple AV components at once.) To emphasize the importance of Harmony in the product, at the launch of the Revue in October 2010, the company spent at least as much time demonstrating the integrated remote functionality as it did the new Google TV features.
As we first noted in May 2010 and reiterated in October of that same year, most consumers would fail to understand the value proposition of the Harmony remote. Consequently, it would be discounted when evaluating the value of the Revue at $299, Google TV or not.
In the end, consumers that wanted Google TV in a box were forced to pay for remote functionality that they did not understand and for which they had little interest in paying. Under these circumstances it is hardly surprising the product failed to gain any market traction at the $299 price.
Deflecting is a skill the CEOs understand well, but in this case Mr. De Luca should do Logitech a favor and just tell it like it is (was).
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