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Anyone Concerned? (Update)

Discussion in 'Logitech Revue' started by chicha29, Nov 22, 2011.

  1. chicha29

    chicha29 New Member

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    How long did Sony take, after receiving Honeycomb from Google, to push out the update to Sony Google TV devices?


    As a goodwill gesture, Google ought to offer to Logitech to put Logitech's employees responsible for putting on their "finishing touches" to Honeycomb on Google's payroll. Hell, maybe it ought to be a permanent offer at this stage!


    What's going on appears to me to be an unspoken act of extortion on the part of Logitech towards Google. "Hey, we lost 100 million on this device. Yeah, we did receive the Honeycomb update you sent us. And we'll push it out to the "GOOGLE TV" when we're good and ready - which may be never. Just sayin'. But we could be motivated to get off our butts. What can you offer us?"


    I'm skeptical about this $100 million figure being tossed about. I'm going to look at their financial statements from the past year, right now.
     
  2. eferz

    eferz Well-Known Member

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    Nobody knows exactly when Google submitted any of part of the Honeycomb development kit to their Google TV manufacturing partners. Google did release the finalized Honeycomb SDK for the Android Phones and Tablets based on ARM processors back in February. However, since ARM and x86 isn't binary compatible, I think the Google TV manufactures might have had to wait a little longer. About the only thing we do know is that Google released the Google TV add-on for the Android SDK at the end of August. So, we're not sure when Google finally submitted the final release candidate to Sony and Logitech.

    We can ascertain by the build number's nomenclature that Sony finished their update package on October 23rd, 2011 and it was pushed out a week later. However, the update itself wasn't without bugs and problems and a follow up update was built on November 14th, 2011 to address the DHCP issues with select routers.

    If you compare the value additions between Logitech's implementation and Sony's build, you'll definitely realize that Sony's is a lot less complicated. While the Logitech Revue's Harmony Component is deeply embedded into the core Android component and provides much more functionality than Sony's limited IR compatibility. The Revue is still also the only Google TV platform that includes software and drivers to support video conferencing which is completely outside of Google TV's native support.

    I really don't understand what you're saying here. Not sure why Google would pay anyone from Logitech to do the job assigned from Logitech.

    From the Q2 FY12 Prepared Remarks, we know that the Logitech Revue lost $34 Million in expected profit. This is because Logitech had to refund a portion of the credit for the unsold boxes to their distributors. Otherwise, the distributors were threatening to send back the unsold supply to eliminate their debt to Logitech. That is how and why they revalued the MSRP from $249.99 to $99.99.

    So, we can at least account for $34 Million dollars in lost revenue for the Revue. However, because he compiled the "$100 Million operating profit" loss with the EMEA miscues everyone is assuming the entire amount is due to the Revue. We can only account for a little more than 1/3 of that value from the facts given publically. We don't know exactly how much more of that value rest on the Revue. However, it is probably safe to assume that a greater portion was due to the operational changes in Europe, the Middle East and Africa (EMEA) since that took presedence in his November 9, 2011 Analyst & Investor Day speech.

     
  3. chicha29

    chicha29 New Member

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    Here is Logitech's most recent quarterly Cash Flow statements, through September 30, 2011. LOGI Cash Flow | Logitech International S.A. Stock - Yahoo! Finance In the most recent quarter, cash flow dropped $97 million, but $64 million of that drop was due to their buying-back their own stock!


    Their income statements for the same period, most recent annual and (4) quarterlies, show a profit!
    LOGI Income Statement | Logitech International S.A. Stock - Yahoo! Finance


    Can anyone pinpoint in Logitech's financial statements this supposed $100 million loss due to Google TV? To say that the price drop to $99.00 from $299.00 is the explanation, my retort is that Logitech's has been practicing creative accounting like the rest of American companies in our recent past. It's my opinion that their "Cost of Goods Sold" for the Revue is $99.00 per unit. So by their dropping the price to $99.00, no red ink would have or should have occurred. It's nice for future tax-loss carryforwards if they can get this mantra to stick: "Oh, my gosh, honey we've lost $100 million!" The dog must have ate it.
     
  4. eferz

    eferz Well-Known Member

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    I should point out that you should watch out for sensational journalism that quoted a half-truth to get more readers. The full quote should be, "Operational miscues in EMEA and Logitech Revue cost us well over $100M in operating profit." as indicated on page 3 of the Strategy and Priorities Revisited of Logitech Analyst & Investor Day on November 9, 2011 at the Logitech Investor Relations website.
     
  5. TheRexican

    TheRexican New Member

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    If they sell at COGS, they still have non-distribution related marketing costs above and beyond COGS, hence a loss. There are also R&D costs that were encountered up front. It does not surprise me at all that this mismanaged product cost them that much. Bringing a new category of product to market is a very expensive proposition. Late comers as producers will benefit from Logitechs mismanagement. Logitech spent the money to create a marketplace and a product. Followers will only need to worry about the product and really only refinement at that.

    From Logitechs perspective, it is a rare and often smart thing to actually live the adage that sunk costs are not relevant. They were not convinced that they could make profit going forward. Whether you spent a dollar or a billion to get to that point, it is reason to exit.
     
  6. chicha29

    chicha29 New Member

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    "From the Q2 FY12 Prepared Remarks, we know that the Logitech Revue lost $34 Million in expected profit."


    There is no such thing as an "expected profit" in the real world. That's a creative accounting term and what took down Jon Corzine and MF Global. If I manufacture something for $10.00, but expect to sell it for $100.00, with this "expected profit" approach, I would book a $90.00 profit. Ridiculous, but that's how accounting is practiced nowadays. Now I may only be able to sell this product for $20.00. With this accounting approach, I now have a an $80.00 loss instead of a $10.00 profit!


    And Prepared Remarks don't hold the same legal/financial weight as audited financial statements. So I would disregard this $34 million number. Particularly when it is referred to as "expected profit".
     
  7. eferz

    eferz Well-Known Member

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    Right, and you realize that all the news that have been reported as them losing $100 Million were taken from just about every source except the audited financial statements.
     
  8. Scuzzo

    Scuzzo Active Member

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    not at all concerned.. i will take them at their word.. i will be glad when the push finally happens so all this conjecture and sensationalistic grandstanding about ("We will never get an update") is over.. you jump to conclusions that they will withhold the update... i think when they signed a GTV agreement with google.. they very well may have had an agreement that "end users will be afforded support for this device for at least (this many) up dates"
    no one knows what the contracts stipulated.. except higher ups.. and We are not privilege to this information.. i dunno..

    but i expect the update by the end of the year..
    and if not.. then i will root the thing.. i have no problem doing that..
     

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