Home Thermostat as . . . Trojan Horse*(?!?)
While 2x-3x the cost of a standard thermostat, the Nest thermostat promises to let homeowners quickly re-coup that investment through lower energy bills.
In turn, it supposedly accomplishes that by incorporating a more intuitive, user-friendly display and interface (see photo below); smart software that learns the household’s schedule; plus sensors that detect when a room is empty (and lowers the temperature automatically).
Do they actually work as billed?
Are they going to take the housing market by storm?
Stay tuned . . .
–“Housing’s ‘Nest’ Big Thing?”; City Lakes Real Estate Blog (12/14/2011)
I first wrote about Nest’s high-tech, Internet-enabled thermostat more than 2 years ago.
In my post, I noted that I’d yet to actually see a Nest thermostat in a home.
So, two-plus years later, how many Nest’s have I observed in “For Sale” homes I’ve shown and/or listed?
Exactly . . . one — out of perhaps 600-800 homes.
That’s equivalent to a rather measly market share of .15%, vs. the company’s own representation (in a Dec. Forbes article) that its device is in “almost 1% of U.S. homes” (maybe the number’s higher in Silicon Valley).
Market Share: ‘Almost 1% of U.S. Homes’
According to The Wall Street Journal, “little is known about Nest’s finances.”
But, here are my back-of-the-envelope calculations:
–Number of U.S. homes: 100 million
–Nest thermostat retail price: $250
–Potential U.S. market for “smart” thermostats (assuming 50% penetration): $12.5 billion.
–Potential global market: approximately $100 billion
No doubt, Google and Nest executives have their own version of the above numbers.
But to me, what jumps out about the Google-Nest combination are two things: 1) surprise, surprise, the deal is all about potential, not here-and-now sales numbers (something less than $250 million, according to my calculations); and 2) the two companies are projecting that Nest’s devices capture a very healthy percentage of the overall market, presumably something north of 50%.
Which just leaves this question: if Nest is the iPhone of home appliances, what will be the “Samsung Galaxy?” (not to mention no-name clones and knock-off’s).
*Much of the speculation about the deal focuses on the information thermostats yield about the homeowner’s energy consumption habits, lifestyle, and even whereabouts — and the value of such information to ad-driven Google.
