Nest Smart Thermostats For $249
The desire to save energy by homeowners, a growing awareness of the environment, along with the increasing desire of consumers to want everything controlled by an app on their smartphone has led to the recent rise of “smart thermostats”. In a report issued by Navigant Research, steady growth for smart thermostats is expected through 2020, driven by rising energy costs, increased environmental awareness, regulatory pressure to encourage energy efficiency, and more effective marketing programs. One company that is a growing leader in the area of smart thermostats is Nest.
Palo Alto startup Nest was co-founded in 2010 by former Apple engineers Tony Fadell and Matt Rogers. Known as “one of the fathers of the iPod”, Mr. Fadell, who has authored more than 300 patents, led the Apple team that created the first 18 generations of the iPod and the first 3 generations of the iPhone. Since their inception only 3 years ago, Nest has received $80 million in backing from the likes of Google Ventures, Kleiner Perkins Caufield & Byers, Venrock, and Shasta Ventures.
The Nest Thermostat
Claimed to be the world’s first “learning thermostat”, Nest’s Thermostat learns from your temperature adjustments and can potentially lower your heating and cooling bills by up to 20%. The product contains “auto away” functionality that knows when you are away and adjusts the temperature accordingly for 90% of the homes it is installed in. Even if you are in the 10% where it doesn’t know you are away from home, the thermostat is smartphone-enabled so that you can see just what it is up to in your absence by a few simple clicks.
While Nest has installation professionals on support, or that can even install the thermostat if you need, the Company claims that 3 out of 4 customers install Nest smart thermostats in 30 minutes or less.
According to Cleantechnica, Nest Labs is reportedly shipping 40,000 smart thermostats per month. If we extrapolate those figures out, Nest is now realizing $119 million in revenue per year on this revolutionary product. While these are meaningful numbers, Nest is still just behind the number one leader in sales of smart thermostats, Honeywell, according to a report by Navigant Research.
Nest has very strong backing but the company is currently engaged in litigation with Honeywell over a patent dispute. Their European competitor in the UK, Tado, stands to gain ground since Nest has primarily focused on the US and Canada while just recently expanding into the UK. While retail investors may not be able to invest in the value proposition of Nest yet, homeowners may still want to explore the potential savings realized from investing in one of Nest’s disruptive smart thermostat products.
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