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This is a sign that Nest has found a great market. I don't mean smart thermostats, but in accessible premium home technology (as you can tell, their name is more general than thermostats).

There are many areas of technology in the home that are controlled by very old companies that are in markets that are very slow to innovate. The real proof of this is in these patents (q.v.), which detail seemingly near-archaic technology. Seriously, this is their state of the art? These are exactly the kind of competitors you want to have.

That is a byproduct of the fact that brands and design for home technology last a long, long time. Recently, I replaced my gas water heater valve and discovered that it's a part that's been around since the 1950's in its current design. Proven technology sticks around. Similarly, Honeywell has been in thermostats since forever.

Finally, the margins in this business can be pretty impressive. There are home appliances and technology products whose premium versions cost twice as much as the regular version even though they're not much different. Some people are just willing to spend a good bit more for the absolute best. Very much an Apple market strategy (i.e. high-capacity iPods).

I hope to see Nest introduce more devices like their learning thermostat soon, as well as a new way for them to communicate and be controlled which can hopefully improve on and replace the ancient X10 automation standard. Nest is in a great position right now.




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