Google's $3.2 billion purchase of Nest Labs was interesting but for me, raises questions about the potential of the television set-top box as a gateway for the home.
I say this because when Google purchased Motorola Mobility back in 2012, in addition to the handset unit, they also got the set-top box division as part of the package deal. Motorola's set-top box unit is the world's second largest STB vendor and has an installed user base of tens of millions. As cable operators are looking to the set-top box as a springboard to offer more services for the home, hardware vendors are adding WiFi and ZigBee making them part of the home network, and for many, a thing of the internet. But last year Google sold off Motorola's Set-Top Box unit To Arris For $2.6 billion.
Nest is reporting some very impressive volumes, with more than one million Nest thermostats sold already. That's a very impressive number for the startup, and does put Google into the homes of many innovative users. And of course it does provide Google with some fantastic talent. But why on earth did Google sell off the set-top box unit that was in many
Having some experience from the set-top box industry, I know that cable and satellite operators can be rather protective of their walled gardens, and understandably so. But this does hurt innovation. And given the significant potential conflicts of interest between operators and Google (YouTube, Google TV,...), Google was looking for a more forward-looking way into the home.
Google gave up a fantastic footprint in the home for some good reasons. I assume Google has no seller's regret getting rid of the unit. They came to the conclusion that the set-top box business wasn't the best way through the front door. Rather, now they're looking to bring combine an Apple-esque hardware experience with their vision of the internet of things.