Jul 26

Logitech Revue drops to $99, that’s below cost price

If proof were needed that consumers either arent ready for Google TV, or at least arent willing to pay for it, look to Logitech and its new strategy for selling the Revue hardware.

The company released the Revue Google TV box as a launch partner with high hopes of cashing in on Googles latest service last year. But things didnt exactly go according to plan. Sales were low and networks started blocking content for fear of losing advertising revenue. Then Logitech were thought to have frozen production of the Revue based on very poor sales.

Logitech were quick to deny theyd stopped production or that anything was wrong with the Revue. But that was back in December, and the market for Google TV or the Revue doesnt seem to have picked up much.

Just like Nintendo cut the price of the 3DS by 40% to spur sales earlier today, Logitech has taken the decision to cut the price of the Revue quite drastically. The $249 unit is expected to re-appear at just $99. How drastic of a price cut is that? Well, Logitech will be selling them at below cost and incurring a $34 million charge because of it.

The logic behind this loss-leading sales pitch is to both drive demand and line up consumers for buying lots of accessories for the device. Logitech is also pinning a lot on the next update to Google TV which will bring a host of new features including the Android Market.

We managed to get a preview of Google TV 2.0 developer program last month, and it seemed like there is still a lot of work to be done before it is ready to go.

Selling your hardware at a loss and hoping to make it up in accessory sales profits sounds like a risky business to me. It works for games consoles, but then thats a sales model that requires you buy further products. With the Revue theres not going to be as much of an incentive to keep purchasing accessories.

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