Nest is behind Google to create a unified smart home platform

According to the latest news from foreign media, Googleâ€™s parent company Alphabet officially announced that it will reorganize its smart home subsidiary Nest in the future. Nest will be fully integrated into Googleâ€™s Internet of Things division and join Google Homeâ€™s product development. This means that this is equal to Google, Nest, which is a subsidiary of Alphabet, will be formally incorporated into a subsidiary of Google.

Nest was founded in 2011. Its main founder was former Apple engineer and "father of iPod" Tony Fadell. Nest has launched two star products: one is the smart thermostat that was introduced in 2011 as an alternative to air-conditioning remote control, and the other is the smart smoke alarm that was introduced in 2013. Both products have received a lot of consumers since their launch. Sought after. In 2014, Nest was acquired by Google for USD 3.2 billion. The company's natural success has become the focus of attention in the industry.

In 2015, thanks to Google's corporate restructuring, Nest became a subsidiary of Alphabet and its position is consistent with Google. Obviously, Alphabet initially had high hopes for Nest.

What was the reason for a smart home celebrity company that had once been highly regarded and was thrown into the cold room?

Internal Worries

Atmosphere

According to the survey of foreign media information, Nest's internal atmosphere is very poor, managers are not in a good relationship, and Tony Fadell's image in the employee's mind is very poor. He is called a "bureaucracy tyrant," which has led to a large-scale turnover, even Dropcam. The original CEO Greg Duffy also left shortly after the merger of the two companies in 2014. Greg Duffy broke the news in his blog post, Dropcam's original 100-person team probably only left 50 people, and Nest's cumulative turnover of up to 500 people.

At the same time, netizens â€œthrowawaynestâ€ who claimed to be Nest's internal employees expressed similar views in the forum. They said that Tony Fadell was cranky and difficult to cooperate with. The companyâ€™s management was chaotic and the brain drain was serious. Interestingly, Tony Fadell also eventually left Nest in June of this year.

product

Worse, the Nest product is slow to iterate. Due to the internal management chaos and brain drain, the product development cycle has been greatly affected. Since the smart smoke alarm was released in 2013, Nest has 1,200 employees. Within a period of two years, only one smart camera product was launched, and those who broke the news claimed that a great deal of their energy has been invested in the maintenance and optimization of previous old products.

And the flagship product has frequently experienced quality problems. Due to bugs in various products and insufficiency of functions, many consumers were dissatisfied, and even once the products were forced to leave the company and refunds were apologized. From Amazon's data on Nest's price of $224 smart thermostats, it can be found that a large portion of the 4283 product reviews are bad reviews, and 1 star rating is 16%.

Performance

It is not hard to imagine that the problems of the product directly affect the market performance of the entire brand. A Nest employee broke the news that Nest's performance was not satisfactory. Most of the companyâ€™s annual revenue of RMB 327 million was contributed by Dropcam's products, not Nestâ€™s smart home products, but the companyâ€™s annual expenses However, as much as 500 million U.S. dollars, it has already made ends meet. For 2015 sales revenue, Google had expected Nest to reach 448 million US dollars. But in the end, Nest failed to achieve its annual revenue of only 340 million US dollars.

Alphabet Adjustment Strategy

In addition to internal issues, Alphabet's adjustment of the smart home strategy is also a key factor in the merger of Nest.

Since Google adjusted its internal structure in 2015 and established the parent company of Alphabet, the first problem it has faced is the fact that there are many internal problems and mutual internal resources. This is no longer a secret in the industry. In addition, from the experience of companies such as Amazon and Samsung Electronics, a company can only have one smart home platform. This constitutes the major premise that Nest is merged.

In addition, it has to be taken into account that, since Amazon launched the smart assistant product Echo in 2015, the entire smart home market has undergone tremendous changes. Technology companies have started to imitate Amazon, thinking that this model of voice assistant is more suitable as a central platform for smart homes than smart phones.

So at this year's I/O conference in May, Google officially launched the product "Google Home" that imitates Echo. Like Amazon, this hardware also opens rich API interfaces to third-party appliance manufacturers in order to become a smart home platform that can flexibly and easily control various home appliances such as refrigerators, televisions, and electric curtains made by other companies. This constitutes an external driver of the merger of Nest.

Summing up, in the face of continuing internal problems of Nest, in the face of continued internal friction among various â€œmountainsâ€ within Alphabet, and in the face of new products from competitors, Alphabet clearly recognizes the seriousness of the problem and intends to change it. As a result, the merger of Nest and its full involvement in the development of Google Home products has become almost the only viable option.

At present, in the era of artificial intelligence technology is about to usher in a great development era, smart homes may be made more convenient and user-friendly, like Amazon Echo and Google Home, and eventually an all-around assistant product will be formed. This is the future. Development trend . So, in this sense, if Nest finally merges into Google Home, it's a general trend.