Connected gadgets may be overrated

April 8, 2016

Timothy B. Lee at Vox takes a look at Nest. “A few years ago, Nest was widely viewed as one of Silicon Valley’s brightest stars,” he writes. The company introduced the Nest Learning Thermostat in 2011 and was acquired by Google for $3.2 billion in 2014.

“But since then, Nest has struggled,” Lee writes. “It acquired Dropcam in 2014 and rebranded Dropcam’s flagship security camera as the Nest Cam in 2015. Beyond that, Nest hasn’t introduced a single new hardware product, and it looks increasingly unlikely that it can justify that lofty acquisition price.”

Lee cites some potential internal issues at Nest that could keep it from becoming the next Apple, but he suggests that the overall problem is that “…the entire category of Internet-connected home devices doesn’t seem that promising.”

Nest has been working on its “Works with Nest” compatibility program, which aims to ensure that smart home devices can work together. As reported in The Verge in January 2015, if you have an August Smart Lock and lock it on your way out the door, it can tell your Nest thermostat you’ve left and to turn the heat (or air conditioning) down. But how useful is that, really? I can think of many cases where I may leave the house but don’t want the heat turned down—someone else may still be at home, sleeping, for example.

Writes Lee in Vox, “Wifi-connected lightbulbs, thermostats, crock pots, and smoke detectors have been on the market for several years now, and they don’t seem to be generating anything like the level of enthusiasm or market demand that smartphones and PCs did in previous generations.”

We just don’t interact with those products very much, he adds, “…so there is only so much a better thermostat can do to improve our lives.” Consequently, people are unwilling to pay a premium for a smart thermostat, calling into question the high-quality, high-profit business model Nest seems to be pursuing.

In related news, Klint Finley at Wired comments on the demise of Nest’s Revolv smart home hub. This isn’t the end of the world,” he writes. “If you could afford to buy a $300 hub for all your smart home gadgets, you can probably afford to replace it with something else. And even if you can’t, smart home gadgets rank pretty low on Maslow’s hierarchy of needs. The real problem is Nest’s decision sends a pretty clear signal that you just can’t rely on ‘Internet of Things’ things.”

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