Today’s biggest news story: Google announced that it plans to pay $US3.2 billion in cash for Nest, the smart thermostat company.
Nest was co-founded by two former Apple executives — Matt Rogers and Tony Fadell.
Fadell is basically the inventor of the iPod. Steve Jobs hired Fadell to build the iPod. At the time, Fadell was a contractor. Eventually, he was brought in full-time to run the iPod group. Rogers also worked at Apple, developing iPod and iPhone software.
At Nest, they were hiring a lot of Apple employees. Apple reporter Mark Gurman recently tweeted, “It is *scary* how many Apple engineers are going to Nest.” There was also a recent report that one of the people working on Apple’s iWatch joined Nest.
As a result of the connection with Apple, a lot of people are stunned to see Nest go to Google. Even more stunning are the reports that Apple was never in the mix to buy Nest.
So, why didn’t Apple want to buy Nest? We don’t know, but here’s our speculation…
1. Tony Fadell reportedly does not get along with Jony Ive, Apple’s lead hardware and software designer. In a new book on Ive by Leander Kahney, a source says, “Tony got canned … He was paid off with his salary for a number of years plus so many millions to leave. Tony was canned because he was battling with Jony. He went to Steve so many times bitching about Jony, but Steve had such a tremendous amount of respect for Jony and their relationship that he sided with Jony not Tony.” If this is true, then it’s hard to see Fadell working at Apple where Ive is leading the design of major products.
2. Perhaps Google had an exclusive negotiating window. In his blog post announcing the deal, Fadell says Google has been involved with Nest since day one. He says that he showed a prototype of the Nest thermostat to Larry Page in 2011. Google Ventures led a round in May 2011, and invested again in 2012. It’s possible that Google negotiated an exclusive deal window into its round. Or it could have
3. Maybe Fadell wanted to go to Google! Shock! Fadell left Apple on bad terms. He reportedly didn’t get along with Ive, and he also reportedly didn’t get along with Scott Forstall, who was leading the iPhone’s software at the time. He was supposedly sidelined at Apple after losing a contest to build the software for the iPhone. Over time he left the company. Why would he want to go back to Apple? Especially when Google was very supportive of Nest.
This does look like the sort of deal Apple should be interested in. It’s a company with good hardware and good software working in an area that looks promising for the future.
Its CEO, Fadell, is incredibly charismatic, and charming. In conversations with him, he comes across as the sort of person that could one day lead all of Apple.