Google merges smart home unit Nest with its hardware team in bid to outgun Alexa

Google merges smart home unit Nest with its hardware team in bid to outgun Alexa
12 Feb, 2018

Alphabet Inc. has merged the team of smart home devices maker Nest with its Google hardware group in order to boost the home-automation segment under which voice-controlled gadgets such as Google Home are sold, the holding firm said in a blog post. 

Google Inc. had acquired Palo Alto, California-based Nest Labs in January 2014 for $3.2 billion (Rs 20,565 crore). Nest, which makes smart thermostats, smart cameras and others, doubled its hardware portfolio last year and sold more devices in 2017 than in the previous two years combined, according to a blog post by Rick Osterloh, senior vice-president at Google hardware division, and Marwan Fawaz, chief executive of Nest. The post also said Google sold tens of millions of products for homes in the last year.

A report by media portal TechCrunch said Fawaz will report to Osterloh after the merger of the teams. In September last year, Google said it would pay $1.1 billion (Rs 7,069 crore) for the division at Taiwan’s HTC Corp that develops the US firm’s Pixel smartphones.

"...We’ve signed an agreement with HTC, a leader in consumer electronics, that will fuel even more product innovation in the years ahead. With this agreement, a team of HTC talent will join Google as part of the hardware organisation," Osterloh had said.

Smart wars
A report by news agency Reuters in January this year said Amazon and Google are eager to give consumers a taste of their respective digital assistants, Alexa and Google Assistant, at impulse-buy prices, hoping to lock in customers and profit from later sales of goods and data about buying habits.

According to estimates mentioned in the report, Amazon dominates the emerging market for smart speakers outside of China, with Google closest behind. Sales of the devices are not yet substantial enough to affect the financial results of either company, added the report.
Both companies took small losses or broke even on sales of the hockey puck-shaped devices, analysts estimated in the report.