The Logitech Revue won't revolutionize TV at $300 + accessories

Google TV boxes or televisions will need to follow a subsidized mobile model to keep prices down if Google and manufacturers want this to be more than a geek niche.
Written by Christopher Dawson, Contributor on

The Logitech Revue has already been, errr, well-reviewed in the tech press with ZDNet's Sam Diaz citing the

"'...Harmony' technology that it has built into its advanced remote controls and showed how that technology - which allows a single device to take control over the set itself, as well as the other components connected to it - works in an Android smartphone...I was happy to see that the companies had come up with a way to build remote control functionality into a device that I’m already carrying around."

Matthew Miller also pointed to an enthusiastic review of the "fluid" interface. In fact, it sounds like Logitech has really nailed the first foray into Google Television with a well-executed, Android-based set top box that should be intuitive for users new to this "revolutionary" approach to TV/Web integration. Sounds great, right? Another big Android win for Google!

Wrong. $300 is more than many people spend on a decent LCD TV from Walmart. Add in the $130 mini keyboard (almost a must vs. the included giant keyboard) and the $150 Google Video Chat solution and you could have bought a decent PC with a TV tuner. True, it would lack Android's apps and search integration as well as content from a variety of networks, but a sticker of $580 is more than daunting. It's a killer. As PC Magazine points out, the unit itself is 3 Apple TV boxes.

There's a way to make this explode of course. As described on CNN.com this morning,

At last month's Zeitgeist conference in Arizona, Google CEO Eric Schmidt told reporters that he sees Android as a $10 billion business.

"If we have a billion people using Android, you think we can't make money from that?" he asked.

And Google isn't stopping with phones. The Android network is already connecting 200,000 new devices each day and will soon be making its way into tablets and TVs.

Where are all of those $10 billion dollars going to come from? Advertising and Apps sales, primarily. Which means that it would be very easy to subsidize the cost of the devices through ad revenues and partnerships with cable and satellite carriers, just as the high cost of mobile phone hardware is subsidized by wireless carriers. After all, wireless providers are just looking to defray the costs of their high-end phones; they want us to spend our money on data plans.

Even Apple, king of all things overpriced, has figured this one out. At $99 a piece, Apple is barely covering its parts, manufacturing, and distribution costs for Apple TV. And it doesn't matter since every Apple TV device represents a constant revenue stream from consumers making purchases in the iTunes Store.

The tech pundits are right on this one: Google TV has the potential to be revolutionary and a major source of continued growth for Google, but the price has to be right. Hitting consumers with what amounts to luxury costs in a miserable economy is not the way to get Google's advertising platform and other sources of monetization in every household.

How many of us are willing to buy full-priced cell phones? At $5-600 a piece for high-end smartphones, Android growth would be a fraction of what it is now in the mobile market. $200, however, with a 2-year contract is, at least psychologically, no big deal. The same theory applies to Google TV, but in this case, the price must be even lower. Many of us rely on our smartphones for both social and business communications as well as anytime/anywhere Internet access. Google TV isn't yet something we think we need like DVR or mobile phones (both of which still generally need to be subsidized by carriers to justify them in the average household budget). Give us a $100 pricepoint, though, and Google TV will take off. For now, our laptops and smartphones can happily sit beside us as we watch TV.

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