Google's domination of set-top TV device market indefinitely postponed

Revue set-top box returns outnumber sales in Q1, manufacturer says

The rumors began surfacing 16 months ago: Google was working with Sony and Intel on a Web-capable television content platform called Google TV. The future of digital entertainment, of true multi-platform convergence, was before us.

Except it hasn't quite worked out that way. Logitech International, the company that manufactures Google's Revue TV set-top device, said during an earnings conference call on Thursday that customer returns exceeded sales in the fiscal first quarter, the Wall Street Journal reported.

In the earnings call, Logitech Chairman Guerrino De Luca explained why Revue sales were so poor. From the WSJ:

"There was a significant gap between our price and the value perceived by the consumer."

A classic understatement.

As a desperate measure potential solution, Logitech will slash Revue's price to $99 from $249. It's the second price cut for Revue since its debut last October at $299.

But price isn't the only problem. Feeling threatened by change (as always), the major broadcast networks blocked Revue's access to the programs they show online, and some users complained that it was complicated.

So now Logitech must take a $34 million charge in the first quarter, which more than comprises the company's Q1 net loss of $30 million. In other words, Google TV is pushing Logitech into the red! This was not the way it was supposed to work, Google.

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