Spring is here and with it it comes a smart home industry that is heating up with news of turmoil, intrigue and strategic investments.
Of course, the biggest story over the past few weeks has been the struggles at Nest. The story seems to have a new wrinkle every day, what with employees anonymously posting complaints on Reddit and breathless headlines talking about timebombs. Amidst all the noise, I thought it was time to take a deep look at why what has happened happened, how much of it is due to poor strategic alignment between Fadell and Google's own internal structure and culture, and finally guess where all of this will go from here.
And we couldn't talk about Nest and their problems without also looking at the success of the Echo. Just this week we got one market watcher's estimates of how many Echos have shipped. which led me to put the numbers in perspective by comparing to the early days of Nest.
If you're worried that Amazon's early success in the connected home is going to lead to complacency, don't. It's apparent at this point the company doesn't have a complacent bone in its body, as just this past week or two alone they've added quite a few Dash Button customers and invested in a router startup.
And don't worry: not every piece of news in the smart home involves Nest and Amazon. This past week some new doorbell news came out of the big security show in Vegas and Z-Wave and connected home gear giant Nortek bought a 25% stake in MiOS/Vera. Lastly, petcare company Mars Petcare ventured into the IoT space by buying Whistle.
If you're interested in smart kitchen news, check out our look at the recent unveiling of Juicero, the $120 million-funded connected home juicer startup. When you're done reading that, you can also listen to the Smart Kitchen Show podcast and take advantage of early-early bird pricing on the Summit, which is six months away this week.
Now, on to the news and analysis:
Over the past few weeks, there was really only one story people were talking about in the smart home space, which was an article in The Information highlighting the problems at Nest and talk of Google creating a new smart home competitor to the Amazon Echo. If you look closely, the first signs of potential discord for Nest and Dropcam go back to the time of the Dropcam acquisition. Before the ink dried on the deal, Nest had decided to kill Tabs, an interesting new effort to turn Dropcam into a Bluetooth powered home security solution. As the months dragged into a year, the fact that Nest didn't debut a new camera for so long was a strong indicator that something was wrong. Read More.
One of the worst kept secrets over the past year or two among smart home insiders has been that MiOS, the company behind the Vera brand of smart home gear and maker of the white label MiOS software platform for smart home manufacturers, has been looking for new funding or to get acquired. So when I saw the news this week that Nortek had invested in MiOS and picked up 25% ownership in the company, I wasn't so much surprised as intrigued by a partnership between one of the biggest manufacturers of Z-Wave smart home gear and one of the longest-standing IoT and smart home platform companies. Before we look at implications and what, if anything, this signifies about the broader smart home space, let's take a look at the deal specifics. Read More
Unless you've been living under a rock, you probably know by now that the Amazon Echo is white hot. Just how hot has been somewhat of a mystery, but now thanks to research firm Consumer Intelligence Research Partners, we now have something of an idea: about 3 million units hot to be exact (well, maybe not exact*). Assuming this number is roughly in the ballpark, consider this: This is about three times the amount of units of their learning thermostat that Nest sold by the time Nest sold to Google. Read More
Back in the early days of the digital home, one secretive startup named Rearden Steel captured the imagination of many in space, quite a feat in a market with no shortage of buzz or aspiring entrepreneurs hoping capitalize on growing consumer interest in connected entertainment. Sure, the company's Atlas Shrugged inspired name had something to do with the intrigue, but a bigger reason for the high level of interest in the company was that Rearden was to be the next act for Steve Perlman.
Perlman had built quite a name for himself as the founder of Internet to TV startup WebTV. Eventually WebTV was acquired by Microsoft, and not too longer after Perlman left to create Rearden Steel. For over a year people wondered what exactly he was up to, and when he eventually lifted the veil, it was clear Perlman hadn't strayed far from his digital living room roots with Moxi, a company building connected entertainment devices and software. Read More
Mars Petcare Buys Whistle
The Gist: Interesting news last week with Mars Petcare buying Whistle, the connected pet tracker company, for $117 million.
Our Take: Whistle, which has been called a Fitbit for dogs, was more interesting to us because of their GPS tracking capabilities, which represented a fairly interesting step forward for tracking lost pets. The combination of geofencing and alerts make products like this much better than the reactive nature of embedded chip pet IDs, which usually are only used if a dog strays and picked up by animal control or is killed.
But the bigger and more interesting take-away here is the Mars acquisition shows increasing interest by CPG (consumer packaged goods) brands in IoT. While we've seen significant interest in IoT from consumer appliance makers and service providers, the food and packaged good providers have been slow to move, but with this news, as well as the move by Absolut Vodka, we are beginning to see some CPG makers make more concrete steps into the world of IoT.
Nortek Debuts Combo Security/PERS Hub
Gist: Nortek's health and wellness group introduced the Numera Home Safety Hub, a combo next-generation PERS (personal emergency response system).
Our Take: We've long felt by connecting IoT to eldercare products, the PERS space could be reinvented in a significant way. Good to see Nortek, one of the bigger providers of both PERS as well as smart home and home security hardware being more aggressive in this space, which may be a bigger opportunity overall than home security given the growing number of baby boomers entering their golden years.
Amazon Adds More Dash Button Partners
The Gist: Amazon announced a new slew of Dash Button brands, including...yes... Trojan condoms.
Our Take: Just as the Mars Petcare deal showed one way consumer brands are getting in on IoT, so too does the continued growth of brands getting their very own Dash button. What's not to like about having a Dash button if you're a consumer brand. For the first time for nearly every brand maker partnering with Amazon, they have granular data as well as an in-home instant ordering system. Plus, when you break down the data and engagement, it looks like over half of button users are using them regularly and the to brands are about what you'd expect (hint, lots of detergent and paper towels).
Smart Doorbells Are Hot At ISC West
The Gist: Lots of video doorbell news at ISC West this week.
Our Take: 2016 does look like it might be shaping up to be the year of the smart doorbell, and this was on display at ISC West. Skybell had a slew of new announcements, including integrations with Alarm.com, Monitronics, Honeywell and Kevo. They weren't the only company making a splash with a video doorbell, as Nortek introduced their first model as did Fibaro, while Westinghouse Security had their Frankenlock/doorbell in the Nucli on display.