The latest purchase of Google Inc. – the acquisition of Nest Labs Inc. – is considered to be an indication that Google becomes more focused into digital home automation, although the market is unproven and has been filled with expensive devices that cant communicate with each other.
Nest Labs Inc. is a maker of smart thermostat, which can be controlled from a mobile device. Over the last few years it was focused into developing literally everything that link to the Web and can be monitored remotely. At the same time, Google Inc. also seems quite interested in this market segment. The Vice President of Vivint Inc. – Jeremy Warren – said a potential Googles entry into this fragmented market may turn out to be beneficial to the industry. Mr. Warren said: “They tend to create open platforms, like Android. Thats great for us: Its like Wi-Fi, a technology that we can all use to make the process of connecting more and more devices easier and faster.”
Roger Entner, who is one of the analysts working for Recon Analytics LLC commented in an interview: “The challenge is that you need to have a comprehensive solution and it has to make sense for customers to spend hundreds of dollars to do it, and to pay you on a monthly basis.”
About 5% of the total of the Internet of Things, which is a market for Web-linked devices, is represented by the connected home. The latter is considered by the researcher IDC able to generate a revenue estimated to 8.9 trillion dollars by 2020, which is 4.8 trillion dollars more than the 2012s revenue. Last years survey of the researcher showed that less than 2% of consumers use smart systems and devices to remotely monitor or control home smoke or fire alarms, air-conditioning settings or doors.
One of the analysts working for IDC – Vernon Turner, explained that if Google enters the ad-subsidized smart-home services, and they take off, “service providers could see prices for their services plummet”. The also emphasized on the fact that Google Inc. is well-known for its ability to disrupt markets by offering free, ad-supported services.
According to CNN Money, the current share price of Google Inc. is 0.07% down, and its one-year return rate is 2.49% up. The 40 analysts offering 12-month price forecasts for Google Inc. have a median target of 1,125.00, with a high estimate of 1,313.00 and a low estimate of 850.00. The median estimate represents a 2.06% decrease from the last price of 1,148.62.
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