The $3.2 billion that Google paid for Nest is starting to make a lot more sense

Earlier this week, Nest launched a new smart camera called “Nest Cam,” a device that will let users see what’s going on inside their home with their smartphones when they’re away. Nest Cam takes Nest beyond its core smart thermostat and smoke detector markets, potentially making it a strong home security device maker as well.

And when you look at the market size potential, it starts to make sense why Nest would want to get in the connected home security space. According to BI Intelligence, 132 million smart home security devices will be shipped this year. That number is estimated to grow to 709 million devices by 2019.

If Nest Cam could win just 3% of the total estimated shipments of smart home security devices by 2019, that would translate to more than $US4 billion in sales (Nest Cam costs $US199 per device) — which is more than the $US3.2 billion Google paid to acquire Nest in 2014.

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