Google TV's 'embarrassing' sales

When Google announced Google TV last year, much ado was made about the software's ability to bring web surfing and media streaming to television sets. But, now an "embarrassing statistic" reveals that Google TV isn't doing so well... at all. According to Logitech, the manufacturer of the Revue Google TV set-top box, more of the devices were returned last quarter than were purchased by customers. Here, a brief instant guide:

What's happening?

Logitech International, the company that makes the Revue Google TV unit, announced Thursday that sales of the device last quarter were so poor, returns outpaced purchases. "There was a significant gap between our price and the value perceived by the consumer," says Guerrino De Luca, Logitech chairman. "Google TV has not yet fully delivered on its own promises."

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What promises are those?

To give customers easy access to streamed content from TV distributors. The software and the device were quickly hamstrung by problems with the major television networks, who prevented their content from being streamed through Logitech's box and opposed legislation that would have given Google TV easier access to cable TV.

How much do the devices cost?

The devices were selling for $249, after a price cut from $299 earlier this year. Logitech now says it will further lower the Revue price to $99, on par with Apple's internet TV device.

Why were so many returned?

It's unclear. Reviews of the Logitech Revue were somewhat strong, but some felt it was too complicated for the average user and problems with the networks persisted. Others point to broader issues with Google's Internet-connected-television business. "There is a lot that needs to be sorted out for this type of platform to succeed," says Van Baker, Vice President at the Gartner technology research firm. "The issues are centered around business models more than around technology." Following the Thursday reveal, Logitech clarified that the returns were primarily coming from distributors and retailers and that consumer returns were at average levels.

What does this mean for Google?

"The lackluster performance of the Revue marks a setback for Google Inc.'s television ambitions," says John Letzing in The Wall Street Journal. Yes, for tech insiders, Google TV, particularly the Revue, "already feels like a flop," says Peter Smith at PC World. But, the average customer probably isn't aware of the platform, much less its embarrassing issues, and the Revue's new lower price could "possibly turn things around" for Google TV and help it compete with the similarly priced Apple TV and Roku. Still, it's a big issue for Logitech, which posted a $45 million operating loss for the quarter and is looking for a new CEO.

Sources: Engadget, PC World, Technology Review, Wall Street Journal, Wired