Following disappointing results in its fiscal Q1, Logitech used its earnings call Thursday to announce several initiatives designed to improve results in future quarters, including the ouster of CEO Gerald Quindlen and a second price cut on the struggling Revue set-top box to $99. Chairman Guerrino De Luca will be acting CEO and president until a replacement is named, De Luca said during the call, stressing that the company needs to “significantly improve performance” and attack challenges with “a greater sense of urgency.” Citing a “very weak quarter” for sales of the Google TV-based Revue, Logitech instituted its second price cut on the Revue, which launched last October at $299 and got a shave in May to $249. Logitech launched the Revue with the expectation it would generate “significant sales growth” despite a “relatively high price point,” the untested waters of the smart TV category and “the underlying [Google] platform,” De Luca said. In hindsight, there are “a number of things” the company should have done differently, he said, but engaging with Google “was the right thing to do” because it enabled Logitech to establish a relationship with a technology leader, he said. The relationship promises “to bear more fruit down the road,” he said. When asked to expand on upcoming changes in the Google TV platform and possible design changes for the Revue, De Luca said the revamped Google TV will undergo “a major update” in September, bringing the platform to “what it always should have been,” which includes apps designed for TV viewing. All existing Revue products will be compatible with the update, he said. The decision to drop the price of the Revue to $99 from $249 followed the realization that “there was a significant gap” between the price of the Revue and its value as perceived by consumers, De Luca said. The company “paid a significant price for the decision” but the latest price reduction should help spur sales and allow the company to move forward, he said. Regarding Logitech’s miscalculation on the retail value of the Revue box, De Luca said, “At the beginning we believed fully that the price point was justified and that consumers would see that value. We were wrong.” He added that Google TV “hasn’t fully delivered on promises,” including an app market, as well as “some evolutions needed in content and UI.” He maintained, though, that at $99, and at “under $150 for a Revue and webcam,” the product is a “compelling” value for consumers. The price cut brings Revue to a “break-even” proposition, De Luca said, saying the company hopes to implement several strategies including changes in the channel mix and add-on accessory purchases to build margin into sales. “This is not going to be our more profitable line, but it’s absolutely essential” that the company has a strong penetration in the smart TV market, he said. From the beginning, he said, the main reason to enter the smart TV category was “to create a large base, not to sell a lot of boxes.” He wouldn’t discuss future products that might provide a more profitable margin. Sales for fiscal Q1 2012 were $480 million, marginally up from $479 million in Q1 fiscal 2011, the company said, but excluding the favorable impact of exchange rate changes, sales declined by four percent year over year. The company posted an operating loss of $45 million, compared to operating income of $12 million in the same quarter a year ago. Included in the Q1 operating loss is a $34 million charge to cost of goods sold due to the planned price reduction on the Revue, it said. Net loss for the quarter was $30 million compared to net income of $20 million a year earlier. Logitech shares closed down 7 percent Thursday to 9.58.
DisplaySearch cut the 2011 global outlook for TV shipments by three percent to 252 million units in its latest quarterly forecast report released Wednesday. While growth remains strong in emerging markets including China, Latin America and India where household penetration for flat-panel is “relatively low,” demand in developed markets including North America, Japan and Western Europe continues to be “very soft,” DisplaySearch said.
OfficeMax will add Barnes & Noble’s All-New Nook and Nook Color to its in-store and online e-reader lineup beginning Saturday, the companies said Wednesday. OfficeMax sells e-readers from Aluretec and Pandigital ranging from $129 to $179, according to the retailer’s website. The retailer didn’t respond to questions by deadline about plans for the existing product line following the addition of the Nook devices. The All-New Nook sells for $139 and the Nook Color for $249 at BN.com, and Nook devices are also sold at OfficeMax competitor Staples, HSN and Best Buy, among others. Even Kindle creator Amazon.com sells the Nook Color, although at a $20 premium above the $249 list price. OfficeMax competitor Office Depot, meanwhile, carries no e-readers, but the office supply chain carries tablet PCs from HP, Lenovo, ASUS, Toshiba, BlackBerry, Acer, ViewSonic and Velocity, according to its website.
Netflix CEO Reed Hastings sought to downplay negative press the company received after it announced a hefty price increase for its video subscription service last week. The “noise level” from disgruntled subscribers was “less than expected,” given the 60 percent price increase implemented for subscribers who opted into the combination streaming/DVD plan, Hastings said Monday in an earnings call. “We knew what we were getting into."
Netflix CEO Reed Hastings sought to downplay negative press the company received after it announced a hefty price increase for its video subscription service last week. The “noise level” from disgruntled subscribers was “less than expected,” given the 60 percent price increase implemented for subscribers who opted into the combination streaming/DVD plan, Hastings said Monday in an earnings call. “We knew what we were getting into."
NextGen, a company better known for remote control extenders, introduced $79 universal active-shutter 3D glasses that it says will work with “virtually any 3D TV.” NextGen claimed its universal glasses were the only ones available that use rechargeable batteries. When we brought it to NextGen’s attention that Monster’s universal MonsterVision Max 3D glasses ($129) are also rechargeable, the company said it would retract its original claim and replace it to say it’s “one of the first” to offer 3D active-shutter glasses with rechargeable batteries. Xpand’s universal X103 3D glasses ($73.90 at Amazon), meanwhile, operate on replaceable CR2032 batteries. The NextGen glasses are rechargeable via a supplied USB cable and have a three-hour charge time providing 50 hours of operation per charge, the company said. NextGen will exhibit at the CEDIA Expo showing the glasses and a new line of flat-panel display mounts, it said.
Moves in the last month by Netflix and Apple may point to a world without optical discs, sooner than consumers with disc-based libraries and other AV companies in the home entertainment chain might be comfortable with, BTIG analyst Richard Greenfield suggested in a blog post Monday. He thinks Netflix may be trying to kill off the DVD when it changed its plans to include both streaming and DVD options for $15.98 per month, and the arrival of Apple’s new optical-free Mac Mini is a second serious punch, he said.
Touting the first Android tablets certified for Netflix streaming, Lenovo began Wednesday selling an Android 3.1-based tablet, one of three tablets the company plans to have in the market this year as part of a strategy designed to offer “something for everyone,” according to Ninis Samuel, Lenovo global director of product marketing. Instead of offering a “one size fits-all” tablet like others currently on the market, Samuel said that Lenovo is offering “a full family of tablets” for entertainment, for business “or both.” He emphasized “choice, flexibility and highly customizable options.” The two tablets available this summer are Android-based -- one for business and one consumer -- and a third, due out in Q4, will be a Windows 7 model, Lenovo said.
In an effort to grab more of the mainstream market, Sonos has revamped its marketing strategy, including a re-branding of its product line, Tom Cullen, vice president of sales and marketing, told us Monday. The announcement coincides with the release of the Play:3 a new audio system that combines three “smart” speakers -- each packing three drivers that can play in mono or stereo mode -- SonosNet wireless mesh networking technology and a digital amplifier. The $299 system links to the Internet for music streaming via a $49 bridge that connects to the home router, and brings a three-room Sonos system down to a new and more affordable price point. The Play:3 begins shipping worldwide on Wednesday, and will sell direct from Sonos and through specialty AV dealers and larger retailers including Sixth Ave. Electronics, J&R, Best Buy, Amazon and Crutchfield, Cullen said. Part of the new marketing plan is a retail display with “fully functioning” systems, he said.
Sales of digital TVs are expected to fall in 2011 to about $18 billion, according to CEA’s semi-annual industry forecast released Monday. With 88 percent of U.S. households owning at least one DTV set, penetration is high for the mature TV category, but it “remains an important contributor to the industry’s bottom line,” CEA said. Connected TVs are a growth sub-segment in the category, though, and 10.4 million network-enabled displays are slated to ship to dealers this year. 3D displays will also see better-than-projected growth as 3D becomes a standard feature in displays and is incorporated into more sets, CEA said. An estimated 3.6 million 3D TVs will ship in 2011, up from a January projection of 1.9 million units, it said.