An idiot's guide to Nest: Google's new $3.2bn baby

Google's new acquisition Nest Labs makes a thermostat that 'learns' your heating habits. The connected home is coming.

by Rachel Savage
Last Updated: 19 Feb 2014

Google has bought a company called Nest Labs for $3.2bn (£2bn). What’s the big deal?

What is Nest?

A Sillicon Valley start-up founded by ex-Apple engineers (including Tony Fadell, the dude who designed the iPod) in 2010, which makes clever home gadgets that connect to your smartphone. Its thermostat learns what temperature you like your house at, turns itself off when you leave the house and allegedly saves you up to 20% on heating bills in the process. There’s also a smoke alarm voiced by a human rather than a wailing beep, which you can wave at to turn off.

Much better than falling off a ladder. But why does Google want to pay so much for it?

$3.2bn sounds like a helluva lot of money for a gizmo that's only sold in the US and Canada, but Google quarterly revenues are around $15bn, so it’s kinda small change for the search giant. Google is also super keen to expand its hardware sales, and has been snapping up lots of robotics companies recently - it’s clearly not content with just dressing us in Google Glasses (if people get over looking like tech dweebs). Apparently Google execs all have Nest gadgets in their home, so maybe Larry, Sergey and co loved ‘intelligent’ temperature control so much they just had to have it for themselves.

Google already knows my online dating habits and love of 90s boybands, I’m not sure I want it knowing when I’m home.

They knew you would say that, so Nest’s co-founder Matt Rogers took to their blog to try to allay everyone’s Big Brother fears: ‘Our privacy policy clearly limits the use of customer information to providing and improving Nest’s products and services. We’ve always taken privacy seriously and this will not change.’

Apple likes gadgets. Why didn’t they buy Nest?

Nest products are already sold on the Apple store, and you’d think Apple might want to bring the boys back under the mother hen’s wing. However, Apple has a track record of buying things it needs for its own devices – it bought fingerprint recognition company Authentec in July 2012 and used the technology in the iPhone 5S, which was released in September 2013. We’re still not sure what the famously-tight lipped company is planning for motion sensor maker PrimeSense, which it swallowed in November (iTV? iWatch?). Or, for that matter, Twitter analytics firm Topsy Labs. But it’s clear that Apple likes to make its own things, instead of buying other people’s. So much for the prodigal sons.

Is Nest’s connected home the future?

Probably. Word on the tech street is that companies are falling over themselves to invent more things that can be controlled at the touch of a smartphone button, and it seems Google would love to be that company (or buy them). MT just hopes wires don’t get crossed when our ovens and dishwashers come online.

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