Earlier this month Google bought Nest Labs for a hefty $US3.2 billion.
Co-founders Tony Fadell and Matt Rogers are both former Apple employees. Fadell is called “The Father Of The iPod” for his work in designing the revolutionary MP3 player.
Nest thermostats have an very Apple-like aesthetic, and Apple even sells Nest devices in-store, so people were surprised when it was Google who bought Nest, and not Apple. Last week, it caused a stir when Apple VP Phil Schiller unfollowed Fadell on Twitter.
Fadell sat down today with Bloomberg Television’s Erik Schatzker and Stephanie Ruhle at the World Economic Forum at Davos and shed some light on how and why the deal came to be.
He said that when it comes to Nest’s current relationship with Apple, it’s up to Apple to decide whether they still want to keep ties.
“They have been a valued partner,” he says of Apple. “We have a lot of iOS device owners that use our products, and we want to offer them our products and it is for Apple to decide if they want to continue.”
Fadell also said that, ultimately, the Google sale was about getting out to the world faster and made sense because Google and Nest shared the same vision.
Watch the full interview:
And check out some of the transcript from Bloomberg:
On how being owned by Google changes things for Nest:
“For us, we have been on the market for two years. We’ve been producing new products, but we wanted to roll them out to multiple countries. We are in 96 countries where we don’t even sell today because we can see these items being connected but we can get these fast enough. For us going with Google, we could get financing, no problem, but we can get access to resources to allow up to move these products much more quickly around the world. As a small start up, you have to build this.”
On why $US3 billion was the right number:
“This was about a vision that Larry and the board understood. They wanted to build this out in a big way. For us, it was about getting out to the world faster…We have a revenue based business. We can see the revenue trajectory. We make money. Nice money. We have right customers and a great brand and other assets besides our products, our patents, and other things, and our vision for the future.”
On whether Google will get as much out of Nest as Nest will out of Google?
“They have offices and services around the world. I think we’re both coming together to learn from each other. There’s a lot of things that I think I benefit both sides. Typical mergers happen when there are two competitors coming together, and they reduce overhead. That’s not what this is about. These are two like-minded visions coming together with consummate resources and putting those together and then letting those things grow and flourish.”
On whether we should have privacy concerns that Google will know more information about our habits now:
“Let’s be clear. The Nest terms of services, are we use the Nest data to improve the products and that has not changed and that will not change. If it ever does, we will make sure to let you know. Right now that data is not going into all the others.”
On what other products are ripe for distribution:
“There are lots of things. When we have all these bits and bytes from cell phones, when we have billions of cell phones and smartphones, all these different ingredient pieces – silicon and software – are tangible to put into all of these different products around is that you have never seen. You can see refrigerators. We are not talking about refrigerators with basically a table on the front, but connecting it so it gives energy signals and also when you’re home or not. It can actually turn off and use less energy and help you save more money. It doesn’t have to be a screen, but can have these little bits and bytes to help you get smarter.”
On whether the Internet hype is limitless:
“I don’t know about limitless, but it will gradually over time come into our lives to help bring more convenience to our lives to allow us to do other things we like to do. If you look at over the last 30 or 40 years, the only information that is happened was electrical appliances. Appliances came in and the home has been stagnant since then.
On what our homes will look like in five years:
“What you want it to look like…At the end of the day, it’s really about making sure it is safe, making sure you’re saving energy. Today, we are wasting so much energy because it is cumbersome. Why doesn’t it know more about you and just to the right thing for you on your behalf so you don’t have to sit there and press all the different buttons? It is not about getting in your face with technology, maybe we think about the smartphone everyone walking around like this, but taking these cumbersome things away from you to trim the waste…Energy savings is one aspect, but it is also convenience.”
On whether everyone needs to do everything remotely from a smartphone:
“Not remotely, but there is a piece of mind that comes from having a cell phone and looking at the status of your home when you’re not there, like travelling like we are today. It is a piece of mind. What we’ve found no one cared about their thermostat two years ago. We have our customers and now they are actually checking their apps all the time to make sure their home was ok. Now all of a sudden they care. Just like you did not check e-mail before, now you have to check it every give seconds.”
On the future of his relationship with Apple:
“I have lots of friends, I have gotten great thank you and support. Today we are in the Apple retail stores. We have iOS support and that has not changed…[staying in the Apple stores] is their decision. You should ask them. They have been a valued partner. We have a lot of iOS device owners that use our products, and we want to offer them our products and it is for Apple to decide if they want to continue.”
On how Google may change Nest:
“I think there are a lot of things we can trim about. The transaction is not closed, let’s be clear. We cannot jump the gun. Right not it is business as usual. When things close – it is premature to talk about these things.”
On how the relationship with Google transpired:
“Google ventures has been an amazing partners [they were investors] and through that relationship, and I’ve known many people at Google for years, it is Silicon Valley. It is personal…Most of these things happen at a party. We were not up for sale, so we did not have an auction per se.”
On the most interesting thing he has seen in Silicon Valley that does not involve Google or Nest:
“That is an interesting question. Some interesting things I’ve seen? Well, you can say there is a self driving car. I’m seeing the automation of vehicles. Really, computer-assisted driving. I think that is really interesting to us because we are taking all of the sensors technologies and putting them in cars and making people safer. I’m really encouraged by that and seeing where those things are going. I think it will happen much more rapidly than we think…Between three and five years… Self-driving is very different. Assisted driving we have that today. It is only getting better. It will be assisted parking, all kinds of commerce and things we do in a car today that will be taken away to make it safer.