According to a report out of 9to5Google, it appears that Google may be rebranding Nest. This would be a pretty big deal for Google, after all, it bought the company back in 2014, and has yet to rebrand it or even combine it with another division under Google or Alphabet. Nest has been a point of contention for Google and investors in the past four years since Google bought the company. This is because it was originally under the Google umbrella, then separated and out and sent to Alphabet's umbrella, and eventually brought back under Google when it combined its hardware division and Nest earlier this year. Google isn't too sure what it wants to do with Nest, but it does want it to make some money. Since acquiring Nest, it has done very little in announcing new products. Basically buying Dropcam and rebranding its cameras, and then announcing Nest Secure and Hello (its Video Doorbell) last year. So a name change might be in order for Google with Nest.
The sources that were spoken to for this report did note that the talks are still very early, so it could end up not happening. There's also no word on when exactly this might happen. It's all up in the air for right now. But one thing is for certain, Google wants to make some changes at Nest, and the reason is likely to bring in more revenue. A rebrand may not be as helpful as Google hopes it will be though. Nest is going to need to undergo some significant changes if it wants to compete with the other smart home companies out there. One thing that Nest could do is drop its prices. Nest was founded by an Apple employee who created the first iPod, so it wasn't a surprise that Nest products were expensive, but now that the smart home space is dominated by much cheaper products that serve the same functions, Nest needs to drop its prices. It also needs to put out some new devices. After all, its thermostat hasn't been refreshed in a few years now.
Background: Google acquired Nest in 2014, for about $3.2 billion. This happened only two weeks before Google ended up selling Motorola Mobility to Lenovo for around $2.91 billion. At the time, many believed that Google had sold Motorola as a way to get its partners off of its back. Seeing as owning Motorola meant that they were essentially competing with their partners like Samsung, HTC and LG. But picking up Nest, was a smarter choice, and getting them into the smart home space. Which, four years ago, was a much different place than it is today. Nest was also an Apple-dominated company and most of the customers of Nest were also Apple users. So Google was getting into more homes than just Android was. But the real reason for this was, to get started on its own hardware division.
Things for Nest at Google were pretty rocky. Just six months after Google purchased Nest, it then purchased Dropcam for $555 million. At the time, Dropcam was a pretty successful company working on smart home security cameras. This was long before Arlo, TP-Link and others were in the game of security cameras. Nest absorbed Dropcam and rebranded its cameras to Nest Cam. After acquiring the company, Nest and Dropcam's founders had a huge falling out. And this led to Dropcam's founder leaving the company less than two years later. It was widely known that the two didn't get along and he then regretted selling Dropcam to Nest (and Google). But it wasn't actually Dropcam's fault, it was actually Nest and its founder, Tony Fadell's fault. Fadell eventually left the company, and is now working on another startup. Fadell came under fire quite a bit in the past few years, due to the fact that he would berate his subordinates and force them to start over on a project if he didn't like it. That is what led to Nest not creating any new products in the first three years of it being under Google's ownership. This, among a few other things, led to Rishi Chandra taking over at Nest, and Google eventually combining Nest with it's Google Home team, earlier this year, which made a ton of sense, seeing as the two teams were working on smart home products, and having them separate made very little sense. So that now, Google's hardware chief, Rick Osterloh is now in charge of Nest as well as the rest of Google's hardware team.
Impact: Google has owned Nest for over four years now, and the company has done very little under Google and Alphabet's umbrella. The company really wants Nest to be more profitable than it is. It makes money, but nowhere near the level that some of the other companies inside Google and Alphabet make. Of course, part of this is due to the fact that it is working on smart home products, and people don't need to buy those all that often. A rebrand of Nest could help it sell more, and possible take away the stigma of what Nest was – a smart home company targeting Apple users. But Google should really absorb Nest completely in the Google Home team and create a smart home products team at Google – maybe not under the "Google Home" moniker, since that is really still targeting smart speaker and smart displays running with Google Assistant. But this is all part of Google wanting to "supercharge Nest's next mission", which it stated earlier this year when it brought its hardware team and Nest together.
As mentioned, this rename is not official, heck this report didn't even mention what Google may rebrand Nest to just yet. That just shows how early in the process this is right now. There is a chance that Google could decide not to rename it all. Possibly even sell Nest like it did to Motorola back in 2014, after owning it for a couple of years. It's unclear what Google is going to do with Nest, but one thing is clear, it wants it to make money and sell more products, as any company would want.