Experience Trumps Features

Steve Jobs was quoted saying the following at the launch of iPad2 earlier this week:

Apple’s pushing it as a giant leap forward. That’s it for the video. Again, this is the intersection between technology and liberal arts. It’s in Apple’s DNA that technology is not enough. Hardware and software need to work together. Nowhere more true than in the post-PC market. Competitors describe tablets like PCs, with specs and the like, but the iPad shows that it’s all about the intertwined software and hardware. They need to be easier to use and more intuitive than PCs. Jobs thinks that they’re going to be competitive.

This really goes to the heart of how different Apple is from Google. Let me give you some evidence, Google on its GoogleTV effort announced an interesting set of features in the September/October 2010 timeframe – you can read about them here. Of specific interest is the one about “Fling”:

Fling a video to your television

Find a great website on your phone and want to show it to everyone? Now you can. “Fling” what you’re watching, listening to, or doing on your phone by sending it to your TV with the press of a button.

It received feedback and coverage, and NPD’s Ross Rubin tweeted about it as well:

Looks like Google TV’s ‘Fling’ feature will be its counterpart to Apple TV’s AirPlay.

The reality is far from it – and not because the feature does NOT exist but because the experience is tedious. A great consumer experience removes the challenge, removes the complication… In order to “Fling” a page or a video to the TV from an Android phone – you have to “Share”. Yes “Share” – there is no simple press of a button. On the Browser bring up the “Menu” (1), select “Share” (2), and then select “Google TV Application” (and that’s 3). The idea that it can ‘flung’ is not intuitive, you don’t know anything about it.

Contrast that with Apple’s Airplay, a nice icon shows up in a Media Player (with IOS 4.3 supposedly AirPlay will become available to third party apps as well) – tap the Icon, and select the TV/Device to ‘airplay’ to. The context is within the application and it is not being called share.

Now, purely technically, can Google implementation improve – absolutely yes. The key difference is that they release features with plenty room for consumer experience optimization.

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Notes:

1. Snapstick with meager resources gets it (check out how they “snap” the video to the large TV) BUT to be fair – you need to use their app, and their box connected to the TV

2. Business Insider’s Dan Frommer in a blog post today shows that GoogleTV-based Logitech Revue is ranked #563 compared to AppleTV at #10 on Amazon’s Best Selling Electronics.

 

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Logitech Revue sold 93,400 Units as of Q4 2010

The Logitech Revue has two primary peripherals – MiniController and the TV Cam. Per Logitech’s 10-Q for the quarter ending 12/31/2010 – Revue and peripherals sales were $23.4million.

Assuming all of this was only Revue and using an ASP of $250 (instead of $299, since they dropped it during the Holidays) – it would result in an approximate sale of 93,400 Units in little less than 3 months ….

Note R&D expenses were incurred for Revue development – with the development being outsourced? 10-Q makes special note of increase in Consulting Fees due to Revue. And also Marketing & Selling expenses were higher due to Harmony and Revue. All those loft parties apparently did no good …

A detailed analysis at some point with a better model may be more useful. Below are the significant statements pertaining to Google TV and Revue (mentioned 23 times) in the 10-Q.

Amplify’d from www.sec.gov

For home entertainment systems, we offer the Harmony line of advanced remote controls, Squeezebox wireless music solutions and, in the United States, a line of Logitech products for the Google TV platform, including the Logitech Revue companion box, Logitech Mini-Controller and Logitech TV Cam with HD Vid service. For gaming consoles, we offer a range of gaming controllers and microphones, as well as other accessories.

Adoption of the new accounting guidance primarily impacted the revenue recognized from Logitech Revue and our LifeSize video conferencing products. The adoption had no impact on revenue recognized from the remainder of our peripherals, as they are not multiple-deliverable revenue arrangements.

The sale of Logitech Revue consists of two deliverables: the hardware with essential software delivered at the time of sale, and unspecified additional software upgrades to the essential software on a when-and-if-available basis. Logitech allocates arrangement consideration to each of these deliverables using a selling price hierarchy. Under the new accounting guidance, the selling price is based on VSOE of fair value, if available, TPE if VSOE is not available, or ESP if neither VSOE nor TPE is available. The relative selling price of the hardware with the essential software is based on ESP. The relative selling price of future upgrades to the essential software is based on TPE. Amounts allocated to the delivered hardware and essential software are recognized at the time of sale provided the other conditions for revenue recognition have been met. Amounts allocated to the future unspecified software upgrade rights are deferred and recognized ratably over the estimated 24-month life of the hardware. There was no impact to prior period financial statements from adopting the new accounting guidance as it relates to Logitech Revue, because there were no sales of the Logitech Revue prior to adoption of the guidance.

We achieved retail sales growth in all product families during the three months ended December 31, 2010 compared with the same period in the prior fiscal year, with double digit percentage growth in pointing devices, video, gaming and digital home. Digital home is a new product family combining Harmony Remotes, Logitech Revue with Google TV and peripherals associated with the Google TV platform.

To date the platform has not met widespread consumer acceptance and our sales of Logitech Revue and related products have been below our expectations.

In the three months ended December 31, 2010, our retail average selling price increased 3% compared with the three months ended December 31, 2009, and increased 16% compared with the three months ended September 30, 2010, reflecting in part the launch of Logitech Revue in October 2010

In the Americas region, retail sales increased 31% and 35% and retail units sold increased 6% and 16% in the Americas region in the three and nine months ended December 31, 2010 compared with the same periods in the prior fiscal year, reflecting strong sales of products with higher average selling prices and in particular, Logitech Revue. All product lines produced double digit percentage sales increases in both the three and nine month periods ended December 31, 2010 compared with the same periods in the prior year. Sales of the Digital Home product line were especially strong, based on the newly-launched Logitech Revue.

The launch of Logitech Revue and the associated peripherals contributed sales of $23.4 million to our new Digital Home product family in the three months ended December 31, 2010.

Marketing and selling expenses increased 43% and 46% in the three and nine months ended December 31, 2010 compared with the three and nine months ended December 31, 2009, primarily due to the addition of LifeSize sales and marketing personnel in December 2009, and variable demand generation activities focused on Harmony remotes and Logitech Revue.

The increased advertising and marketing spending related primarily to approximately $27 million of variable demand generation activities in connection with our Harmony Remotes and Logitech Revue, as well as other new product launches.

Consulting fees related to our development of Logitech Revue for Google TV also contributed to the increase in research and development expense compared with the prior year. Read more at www.sec.gov

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