The Future of Nest: What Does It Mean For B2C IoT Companies?

(MCT/Newscom) IT20_nest_033116_newscom Nest founder and CEO Tony Fadell in the company's offices in Palo Alto, California, on October 15, 2013. The venture-backed startup has more than 280 employees and is rapidly hiring. (Nhat V. Meyer/Bay Area News Group/MCT) (Newscom TagID: krtphotoslive643101.jpg) [Photo via Newscom]

Nest, currently under the Alphabet Umbrella was one of the first companies that came to the forefront due to their ventures in the consumer IoT space. Having achieved massive success with their smart thermostat, the company has now spread across to other smart electronics such as smart cameras, as well as smoke detectors.

Future of Nest

Despite being one of the pioneers in the smart home space, Nest has not been able to produce huge revenue figures till now. As a result of this, the company is going through some internal changes as a means of combatting the monetary struggles it’s been facing in recent months.

What’s Stirring Inside Nest?

Future of Nest

In a recent news story it has come out that the longtime CEO of Nest, Tony Fadell is leaving Nest and is joining the parent company Alphabet in an advisory role. In his place, Google has hired Marwan Fawaz, former head of Motorola’s set-top box business.

But why this sudden change of plans for Nest? While not much has been revealed in Fadell’s parting letter, industry sources seem to be of the opinion that there has been for sometime, internal strife inside the company that has led to the ousting of the founder and CEO.

What does this mean for the company at large? We discuss in our next segment!

Companies Are Struggling to Sell Smart Home Products

Future of Nest

For the past couple of years, Nest has been selling their products directly to the consumers. From their security cameras to their thermostats, everything has been sold directly to the user base.

But as the dwindling adoption rates of Smart TVs portray, the consumer market has not yet caught on to the IoT in their home frenzy. And while IoT enabled light bulbs are enticing for most people as they’re a cheap entry point, something like a Nest thermostat or camera presents way too high a price point.

This is why Nest’s change in management is significant as this could see the company trying to shift from a B2C to a B2B model where they will sell their products to the customers as a complete service instead of forcing them into buying the devices up front and dealing with the added hassles of installation and integration.

The Path Forward

Future of Nest

The future for home automation seems to be headed the way of monthly services with low first time costs and where the companies will bear all the hassle of integrating the different aspects of the hardware.

“The retail model for the smart home seems pretty stuck right now,” Jackdaws Research analyst Jan Dawson wrote in his blog post on the subject.

With companies like At&T and finding success employing the same model in recent times, it seems that sales, installation and providing smart home automation as a monthly service are what most consumer-centric smart home based IoT companies are moving towards.

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