However, despite Nest\u2019s success and parent company Google\u2019s substantial investment in R&D, both companies are still trying to catch up to smart device market leader Amazon and fight off competitors like Honeywell.\u00a0 To do so, Google and Nest have made considerable investments into new product lines and partnerships.\u00a0 In fact, Nest experienced a large net operating loss of $621M in 2017, much of which is likely attributable to its expanded product portfolio [5]<\/a>.\u00a0 The company recently introduced 2 new product lines: home security system Nest Secure in late 2017 [6]<\/a> and doorbell Nest Hello in early 2018 [7]<\/a>.\u00a0 In addition, the company partnered with Whirlpool and GE on integrating Nest technology into Whirlpool [8]<\/a> and GE appliances [9]<\/a>.\u00a0 It also is working closely with Google on expanded product offerings with Google Home and Google Assistant.\u00a0 For longer-term goals, not only is Nest doing its own R&D, but it also recognizes that working with Amazon can be beneficial, both from brand awareness and competitive standpoints [10]<\/a>.\u00a0 By doing so, Nest and Google can chip away at Amazon\u2019s dominant position in the market and make their products stickier with consumers.\u00a0 Another key factor to consider is that Nest rejoined Google earlier in 2018, rolling into the hardware division.\u00a0 After a couple months there, Nest then merged with Google Home, allowing both entities to fully take advantage of each other\u2019s expertise and resources [11]<\/a>.<\/p>\n In addition to Nest\u2019s plan moving forward, there are ample opportunities for the firm to establish itself as a smart device market leader through machine learning and product innovations.\u00a0 Business Insider believes the market is currently \u201cstuck in the \u2018chasm\u2019 of the technology adoption curve,\u201d [12]<\/a> but Matt Rogers, one of Nest\u2019s co-founders, sees Nest emerging out of the trough of the product development \u201cHype Cycle\u201d [13]<\/a>.\u00a0 To ensure the company is progressing in the right direction, Nest should utilize Google\u2019s vast resources and focus on expanding its product offerings into additional connected home devices, such as light switches, power strips, and window blinds.\u00a0 It should also continue to analyze its data to glean insights on customer behavior to refine its machine learning algorithms.\u00a0 Nest should emphasize integrating with wearables and vehicles as well, especially as almost half the people in the connected home market own wearables [14]<\/a> and as the autonomous vehicle market grows at 36.2% CAGR [15]<\/a>.\u00a0 Nest should also work on a singular connected platform for all its products, giving it a huge competitive edge by tackling the long-standing issue of a highly fragmented smart device market without clean integration across devices [16]<\/a>.<\/p>\n Nest has clearly established itself as a market leader in the smart devices space, but the company still faces stiff competition and consumer skepticism.\u00a0 What product and partnership areas should Nest focus on? \u00a0How can the company appeal to its expansive consumer base, which potentially includes all homeowners, renters, and landlords?<\/p>\n (799 words)<\/p>\n <\/p>\n [1] Ahuja, Kabir and Patel, Mark.\u00a0 \u201cThere\u2019s No Place Like [A Connected] Home.\u201d\u00a0 McKinsey<\/em>, 2016.\u00a0 https:\/\/www.mckinsey.com\/spContent\/connected_homes\/index.html<\/a>, accessed November 2018.<\/p>\n [2] Reuters.\u00a0 \u201cGlobal Smart Homes Market 2018 by Evolving Technology, Projections & Estimations, Business Competitors, Cost Structure, Key Companies and Forecast to 2023.\u201d \u00a0Reuters<\/em>, February 19, 2018.\u00a0 https:\/\/www.reuters.com\/brandfeatures\/venture-capital\/article?id=28096<\/a>, accessed November 2018.<\/p>\n [3] Nest.\u00a0 \u201cHow Nest thermostats learn.\u201d\u00a0 https:\/\/nest.com\/support\/article\/An-introduction-to-learning<\/a>, accessed November 2018.<\/p>\n [4] Rogers, Matt.\u00a0 \u201cThe Nest Learning Thermostat saves energy. Here\u2019s the proof.\u201d\u00a0 Nest<\/em>, February 12, 2015.\u00a0 \u00a0https:\/\/nest.com\/blog\/2015\/02\/02\/the-nest-learning-thermostat-saves-energy-heres-the-proof\/<\/a>, accessed November 2018.<\/p>\n [5] Niu, Evan.\u00a0 \u201cAlphabet Discloses Nest Financials for the First Time.\u201d\u00a0 The Motley Fool<\/em>, April 24, 2018.\u00a0 https:\/\/www.fool.com\/investing\/2018\/04\/24\/alphabet-discloses-nest-financials-for-the-first-t.aspx<\/a>, accessed November 2018.<\/p>\n [6] Weinberger, Matt.\u00a0 \u201cNest just announced a full-fledged home-security system for $499.\u201d\u00a0 Business Insider<\/em>, September 20, 2017. \u00a0https:\/\/www.businessinsider.com\/nest-secure-home-security-system-costs-499-will-compete-with-adt-comcast-2017-9?op=1<\/a>, accessed November 2018.<\/p>\n [7] Brown, Rich. \u00a0\u201cNest says Hello with a new doorbell camera.\u201d \u00a0CNET<\/em>, September 20, 2017.\u00a0 https:\/\/www.cnet.com\/news\/nest-says-hello-with-a-new-doorbell-camera\/<\/a>, accessed November 2018.<\/p>\n [8] Whirlpool.\u00a0 \u201cConnected Appliances.\u201d \u00a0https:\/\/www.whirlpool.com\/home-innovations\/connected-appliances.html<\/a>, accessed November 2018.<\/p>\n [9] General Electric.\u00a0 \u201cGE WiFi Connect.\u201d \u00a0https:\/\/www.geappliances.com\/ge\/connected-appliances\/<\/a>, accessed November 2018.<\/p>\n [10] Nest.\u00a0 \u201cLearn how to control your Nest products with Amazon Alexa.\u201d\u00a0 https:\/\/nest.com\/support\/article\/Nest-and-Amazon-Alexa<\/a>, accessed November 2018.<\/p>\n [11] Osterloh, Rick and Fawaz, Marwan.\u00a0 \u201cNest to join forces with Google\u2019s hardware team.\u201d\u00a0 Google<\/em>, February 7, 2018.\u00a0 https:\/\/blog.google\/inside-google\/company-announcements\/nest-join-forces-googles-hardware-team\/<\/a>, accessed November 2018.<\/p>\n [12] Business Insider Intelligence.\u00a0 \u201cNest looks to enhance AI and machine learning.\u201d\u00a0 Business Insider<\/em>, January 25, 2017. \u00a0https:\/\/www.businessinsider.com\/nest-looks-to-enhance-ai-machine-learning-2017-1<\/a>, accessed November 2018.<\/p>\n [13] Bradshaw, Tim.\u00a0 \u201cNest looks to the cloud to boost machine learning capability.\u201d\u00a0 Financial Times<\/em>, March 10, 2016.\u00a0 https:\/\/www.ft.com\/content\/bb99c4cc-e673-11e5-ac45-5c039e797d1c<\/a>, accessed November 2018.<\/p>\n [14] Ahuja, Kabir and Patel, Mark.\u00a0 \u201cThere\u2019s No Place Like [A Connected] Home.\u201d\u00a0 McKinsey<\/em>, 2016.\u00a0 https:\/\/www.mckinsey.com\/spContent\/connected_homes\/index.html<\/a>, accessed November 2018.<\/p>\n [15] Market Watch.\u00a0 \u201cSelf-driving Car Market to Grow at a CAGR of 36.2%, leading to global revenue of USD 173.15 Bn by 2023.\u201d\u00a0 Market Watch<\/em>, September 11, 2018. \u00a0https:\/\/www.marketwatch.com\/press-release\/self-driving-car-market-to-grow-at-a-cagr-of-362-leading-to-global-revenue-of-usd-17315-bn-by-2023-2018-09-11<\/a>, accessed November 2018.<\/p>\n![\"\"](\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/Nest-savings.jpg\")
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