Cuckoo! Google flies Nest into its hardware division

Cuckoo! Google flies Nest into its hardware division

Google is to absorb smart devices vendor Nest into its internal hardware team, in a reversal of previous strategy.

Google’s head of hardware, Rick Osterloh, said that Nest will “join forces” with his company. The strategy had previously been for it to continue running as an independent operation.

However, the Nest brand will remain alongside the Google Home portfolio, but will increasingly be powered by Google’s AI and Assistant technologies.

Hard lessons

Nest CEO Marwan Fawaz will report to Osterloh at Google, and few job losses are expected.

Fawaz said, “We’re excited to bring the Nest and Google hardware teams together. The goal is to supercharge Nest’s mission: to create a more thoughtful home, one that takes care of the people inside it and the world around it.

“By working together, we’ll continue to combine hardware, software, and services to create a home that’s safer, friendlier to the environment, smarter, and even helps you save money – built with Google’s artificial intelligence and Assistant at the core.”

He added that he was “excited” to make the division an “integral part of Google’s big bet on hardware”.

That bet grew even bigger last week when Google completed its $1.1 billion partial acquisition of HTC’s smartphone team.

Coming home to roost

Google bought Nest in 2014 for $3.2 billion. The company manufactures smart cameras thermostats, doorbells, alarm systems, and other home IoT devices, which can be managed remotely by mobile apps.

Until yesterday, Nest had stressed its cultural and organisational independence from Google/Alphabet.

At the time of writing, the privacy FAQ on Nest’s website still states that customers’ Nest and Google accounts are “not cross referenced or linked” in any way.

“We’re not in the business of selling data. And we don’t want to be,” it says. “Google does not sell Nest data either.”

Internet of Business says

Google’s decision to move deeper into hardware is beginning to mirror Amazon’s, with a reflection of Apple’s walled garden, too. However, Amazon’s strategy is increasingly about commoditising hardware in exchange for customer loyalty, data, and attracting buyers onto a vast platform that extends from industrial warehouses to people’s living rooms, via its Web services division. Meanwhile, Google’s core business remains data, the currency in which it trades. How long will it be before all those golden data eggs are lifted from Nest?

Plus: Google faces class action

In related news, Google has been hit by a class action lawsuit in California for breach of warranty and unfair competition. The complaint concerns faulty speakers and microphones on its Pixel and Pixel XL phones, the Register has reported.

Plaintiffs allege that Google knew the components were prone to failure before shipping the handsets, rendering Google Assistant – and voice calling – useless.

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