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Why Apple didn't buy Nest
With Google announcing yesterday that it acquired the Tony Fadell-led Nest Labs for a cool US$3.2 billion, an emerging narrative is that Google caught Apple asleep at the wheel. For many who keep a close eye on tech, an Apple/Nest Labs acquisition seemed like a match made in heaven. I myself was quick to hop on this bandwagon, writing yesterday: [There's a] commonly held view that Nest Labs was an Apple acquisition just waiting to happen. Nest's Thermostat was largely viewed as an Apple-esque product insofar that it simplified what was otherwise a cumbersome and confusing activity. It may sound absurd, but the Nest Thermostat really worked to make home temperature automation seem cool, and more importantly, approachable. Given that Fadell has deep roots at Apple and that home automation via mobile devices is becoming more prevalent, many assumed, or perhaps hoped, that if any company were to acquire Nest it'd be Apple. But the more I thought about it, the more it became clear to me that Apple purchasing Nest, especially for billions of dollars, just didn't make a whole lot of sense. Because Google and Apple are such fierce competitors, and because Apple is waging an all-out proxy war against Google via its ongoing legal battles with Samsung, it's only natural to assume that a notable Google acquisition is a de-facto Apple loss. The reality is much more nuanced. Nest products won't help drive more iOS sales Apple has tens of billions of dollars in the bank, a handsome sum primarily derived from good, old-fashioned hardware sales. Even software titles that used to generate cash flow for Apple are now given away for free to the masses, with OS X Mavericks being the most obvious example. To that end, it's hardly novel to state that Apple's software business exists to drive hardware sales. As a result, Apple is exceedingly concerned with ensuring that its software remains intuitive, powerful and a step above the competition. Consequently, Apple isn't interested in getting into the thermostat or smoke detector business. What really lights Apple's fire is making sure that iOS is so big, so prevalent and so important that hardware and peripheral manufacturers from all over the map view iOS integration as a necessity. There's no denying that Nest Labs is doing some really cool work and has already put out two really great and forward-thinking products in just three years time. And again, there's no denying that Nest's products have a distinctive Apple-y vibe to them, a fact which shouldn't come as much of a surprise given that the company was co-founded by two highly regarded Apple alums. That notwithstanding, assume for a second that Apple was the company that purchased Nest Labs. Now what? Now Apple all of a sudden finds itself selling thermostats and smoke detectors. And it paid $3.2 billion for that privilege? Where's the win there? Put simply, would a Nest Labs acquisition ultimately have helped Apple sell more iOS devices than before? I don't see it. In stark contrast, Apple's cheap-by-comparison $356 million acquisition of Authentec directly led to Touch ID, the flagship feature on the iPhone 5s. Hardware sales-wise, Nest Labs would be a micro hobby to Apple Fadell has said that the Nest Thermostat is in nearly 1 percent of US homes. Not too shabby. But Apple in its most recent quarter sold 33.8 million iPhones. That figure is equivalent to 10.6 percent of the entire US population (33.8 million iPhones per 317 million people). Apple is a huge company, so much so that it still considers the venerable Apple TV a hobby, even though it has cumulatively sold more than 13 million units, with the majority of those sales having occurred since 2013. So while Nest has some great products, its product line would be nothing more than a micro hobby for a company as big and profitable as Apple. Apple already has and will likely continue to have the benefits of Nest/iOS product integration Home automation and internet-connected devices are becoming more of a reality with each passing month. Consequently, Apple's doesn't need Nest's products under its umbrella when they already interface with iOS. Of course, it's only natural for cynics to ask, "Well sure, how long is that going to last?" Addressing that very question, Fadell, the iPodfather himself, explained in an interview with The Verge that we have nothing to worry about: Well look, at the end of the day, customer choice is essential. And we don't make products that compete with Apple, nor make products that compete with Google. Our customers come in both iOS and Android flavors, and I hope our customers can still buy the products they want to purchase wherever they want to purchase them. And sure, you can question Fadell's sincerity of Larry Page's intentions if you want, but Google would be a fool if, at some point down the line, it made Nest products that didn't play nicely with iOS. If anything, history suggests that Google wants to be part of the iOS ecosystem while Apple is the company overly concerned and paranoid about sleeping with the enemy. Perhaps Google Voice rings a bell? Ponder this question: What type of person would buy a thermostat or smoke detector first and then base a subsequent smartphone purchasing decision on compatibility issues? The short of it is that as long as Apple continues to sell iPhones faster than they can make them, Nest on iOS isn't going anywhere anytime soon. $3.2 billion for a lone company? That's not something Apple does Another reason why an Apple/Nest acquisition doesn't add up is because, quite frankly, it just doesn't add up. Google is paying $3.2 billion for Nest Labs, an astronomical amount for a company as stingy as Apple. For some context, Apple's most expensive acquisition to date was the $404 million it paid to acquire NeXT (and Steve Jobs). Now if we take a look at Apple's 10 most expensive acquisitions with a publicized purchase price, here's what we come up with. NeXT - $404 million Power Computing - $100 million P.A. Semi - $278 million Quattro Wireless - $275 million Intrinsity - $121 million C3 Technologies - $267 million Anobit - $390 million AuthenTec - $356 million PrimeSense - $345 million Topsy - $200 million Taken together, that comes out to $2.7 billion. And for you currency sticklers out there, note that eight of the above 10 acquisitions were made after 2010. Point being, even if we look at Apple's older acquisitions in today's dollars, Google's $3.2 billion purchase price is still astronomical by Apple's standards. Let's hail Google, not rag on Apple With an acquisition as big as this, and one involving quite a number of former Apple employees no less, it's only natural to reflexively ask, "Should Apple have acquired Nest?" For the reasons listed above, I don't think such an acquisition would have made much sense. Indeed, re/code reported last night that "Google was the only serious bidder and Apple was not in the mix." That said, I think you have to give props to Google for plunking down $3.2 billion for an inventive company with a creative and talented executive team. Whatever Google has in mind, one can only surmise that it has to be big given the large purchase price. For those keeping score at home, the Nest acquisition is Google's second most expensive to date, only trailing its $12.5 billion acquisition of Motorola Mobility back in 2011. I think it's important, and undeniably interesting, to have a company like Google so focused on cool technology that it has no shame in releasing products first, no matter how shaky, random or unprofitable, and asking questions later. Google Glass, anyone? I mean, Google this past December acquired Boston Dynamics, a company renowned for building pretty jaw-dropping futuristic robots. And now Google has spent a boatload of cash to acquire Nest Labs. Who the heck knows what Google's product roadmap looks like these days, but you can safely bet that they have some interesting ideas in the works. Apple undoubtedly does too, but $3.2 billion for a company that sells sleek thermostats and smoke detectors just doesn't coalesce with Apple's DNA. It does with Google's. Interesting hypothetical -- What if Microsoft bought Nest? Imagine for a second that Microsoft, and not Google, acquired Nest Labs for $3.2 billion. Would the discourse be any different? I think it's reasonable to assume that if the leader-less folks up in Redmond spent $3.2 billion on Nest, they'd be lampooned for overpaying.
Nest introduces connected smoke and CO alarm
The makers of the highly-touted Nest Thermostat have just announced pre-orders for the next smartphone-connected product for the 21st-century home: the Nest Protect smoke and carbon monoxide (CO) alarm (US$129). Like the Nest Thermostat, the Protect isn't the cheapest product in its category, but it's certainly the most intelligently designed. It comes in two colors -- black or white -- and two models, one that is wired into your home's AC circuitry and another that runs on batteries. Unlike the cheaper models that chirp incessantly when the battery runs down every few months, the Nest Protect battery version runs on 6 AA cells for several years. The wired version features backup batteries for protection even when the power is out. The outside design of the case has a "sunflower" pattern to move airflow through the device, and a glowing light ring shows you the level of fire danger. When an alarm goes off, a voice (English or Spanish) tells you what and where the danger is. If your cooking efforts set off the smoke alarm, a wave of your hand shuts it off without the need for climbing on a chair or waving a towel at it. And every alarm goes to your iPhone so you don't even need to be around to know that there's a problem. Nest Protect even provides notification that the batteries need to be replaced soon so that you can accomplish that maintenance task before it's too late. It's one more step towards a well-designed and very functional home automation and protection system.
Nest Learning Thermostat gets refreshed with a slimmer design, improved scheduling features
It's been just about a year since former Apple exec Tony Fadell unveiled his newest project, the Nest Learning Thermostat. At the time, it was notable for being the sexiest thermostat in the history of household automation, with WiFi connectivity, mobile apps and an iPod-like click wheel for adjusting the temperature. Today, Nest Labs announced the follow-up to that product, and while it boasts the same tricks as the original, it's noticeably slimmer and will work with a wider array of heating and cooling systems. Oh, and the company is finally releasing an Android tablet app, while the current iOS and Android phone applications are getting updated with new features as well. It's up for pre-order now for $249, while the old model has gotten a price cut to $229. That's the short version, but if you head past the break we'll give you a more detailed walk-through of what's changed.
Amazon becomes the latest retailer to sell the trendy Nest Learning Thermostat
Frankly, we all knew it was only a matter of time before the renowned online retailer, Amazon, would start offering the trendiest thermostat known to man. Joining the likes of Apple, Lowe's and, naturally, Nest's official site, Amazon is the latest shop to welcome the famed Learning Thermostat onto its shelves, with availability expected as soon as tomorrow (June 8th). As for pricing, that won't be changing much, which means you'll still have to shell out $249 -- though, you could see it hit your doorstep sooner without paying extra if you have one of those fancy Prime accounts. In any case, folks looking to grab one of these notorious Nest thermos can do so from either of the source links below.
Apple Store now selling Nest Thermostat: automated toastiness to cost $250
Apple liked it so much, it's decided to let the Nest Thermostat share shelf-space in its bricks-and-mortar stores and online. Following rumors that Tony Fadell's latest project would appear at his former employer's store, it's now been confirmed with an online listing. Following some brief downtime on the Cupertino corp's retail site, the unit is set to retail for $250. Aside from sharing some design DNA, the thermostat unit can also be controlled from iPhones, iPads, iPods and Macs -- we presume that Android functionality is still there. Those that like their summers extra comfortable can hit the store link below.
Nest Thermostat update adds 10-day history, helps send chilly air through the home
There's a first for everything, including Engadget stories about software updates for thermostats. If we're going to suddenly start getting granular in our coverage of home automation products, though, we may as well start with the Nest, a device slick enough to make us use "thermostat" and "sexy' in the same sentence. Now that it's been out on the market for about five months, the company's issuing a software update that introduces a couple new features. For starters, particularly fastidious users can now access a detailed 10-day history, showing precisely when and for how long their heating and cooling systems kicked in, as well as the reason for that shift (e.g., you manually changed the temperature, were away). Though you can't view all that data on the device's small, circular screen, you can look it up online or through Nest's iOS and Android apps. Next up is Airwave, a feature that uses your fan to distribute chilled air through the home after your air conditioner has turned off (you know, instead of letting one room get intensely, unnecessarily cold). According to Nest, that feature turns on automatically when the temperature is high and the humidity low, though we're hazy on the algorithm being used there. Rounding out the list, Nest has made certain settings easier to access, and the hardware itself will ship with redesigned connectors that purport to work well even without wall anchors. Save for that last bit, current owners can enjoy all these tweaks via a free software update -- fully automated, 'o course.
iPod fathers unveil their next project, the Nest Learning Thermostat (hands-on)
Over the summer, we got word that a couple of unnamed ex-Apple engineers were getting ready to unveil an unnamed product, under the guise of an unnamed startup. As it turns out, that startup was Nest Labs, and those Apple alums were none other than Tony Fadell, longtime SVP of Apple's iPod division, and lead engineer Matt Rogers. And yes, the product they had to share makes fine use of a click wheel. But if you thought they'd be cooking up a next-gen music player, you'd be wrong. Instead, the pair have been designing a thermostat, of all things, dubbed the Nest. In addition to being the most stylish model ever to grace a dining room wall, it promises the kind of intelligence we've come to expect in other household appliances -- just not thermostats, per se. It'll go on sale next month for $249 in places like Best Buy, but we managed to snag an early sneak peek. Find some photos below and when you're done, join us past the break where we'll explain how it works. %Gallery-137451% %Gallery-137452%
