Alphabet’s Nest launches new cheaper thermostat in bid to boost sales

Bloomberg

Alphabet Inc.’s Nest introduced a cheaper version of its digital thermostat to spur sales as the smart home sector gains new competitors. The new model, the Thermostat E, costs $170, coming in $80 below the current version, Nest said. To cut costs, Nest used plastic rather than metal for the edges that surround the circular thermostat and swapped the full color screen for a frosted display with fewer colors.
The cheaper model still functions similarly to the original, allowing users to adjust the temperature by turning the device’s circular dial. It still connects to a smartphone, letting people adjust their home’s climate remotely, and adapts to conditions and use automatically.
Nest was founded — and acquired by Google in 2014 for $3.2 billion — based on a long-term goal of becoming the leading operating system for the home. Lately, the focus has been on boosting sales of its hardware devices. The Alphabet unit is also working on a home security system as well as a doorbell with a built-in video camera for next year, people familiar with the plans told Bloomberg News in March. Nest doesn’t disclose results, but it’s a big part of Alphabet’s Other Bets division, which reported second-quarter revenue of $248 million, up 34 percent from a year earlier.
The Thermostat E launch is Nest’s second product of the year. In May, it announced the Nest Cam IQ, an indoor security camera that records high-resolution video and senses when people enter the field of view. With the new products, Nest hopes to strengthen its position in a growing smart home market that is seeing new entrants from established technology companies like Amazon.com Inc. and Apple Inc., as well as startups including Otto.