The Nest Thermostat: Why Steve Jobs Would Be Proud

ANALYSIS

 @redletterdave
on October 25 2011 12:39 PM
Nest Labs' Learning Thermostat uses a simple design to save consumers hundreds of dollars on their heating bill. The thermostat learns its user, but can be adjusted remotely.
Nest Labs' Learning Thermostat uses a simple design to save consumers hundreds of dollars on their heating bill. The thermostat learns its user, but can be adjusted remotely. Courtesy: nest.com

The new Learning Thermostat from Nest Labs may not be an Apple product, but it has the company's name written all over it. In fact, the Nest Learning Thermostat was designed and created by former Apple executive Tony Fadell, who was one of the lead developers on the iPod and iPhone.

Fadell, the former DJ who oversaw 18 versions of the iPod and the first three versions of the iPhone, retired as Apple's senior VP of the iPod division in November 2008, and completely cut off ties with the company last year. He came out of retirement and co-founded Nest Labs with another Apple iPod developer, Matt Rogers. The two founders set up shop in Silicon Valley last year and hired specialists from Apple, Google, Microsoft, Twitter and Logitech, but kept their first project heavily under wraps.

My primary focus will be helping the environment by working with consumer green-tech companies, Fadell said after formally severing his ties with Apple. I'm determined to tell my kids and grandkids amazing stories beyond my iPod and iPhone ones.

Then, on Oct. 25, Nest lifted the veil on its first product, the Learning Thermostat. The thermostat, which has needed a refresh for a few decades now, clearly benefits from Fadell's eye for stylish, innovative consumer technology. The circular Learning Thermostat follows the same silver and black theme as many other Apple products, but Fadell's latest invention is more than just sexy; it's efficient.

The Nest thermostat costs $249, plus $119 for installing one unit and an extra $25 for each additional unit installed in the home.

Today's thermostats consume an astounding amount of energy. Thermostats control about 50 percent of your energy bill.  The average U.S. home spends anywhere between $1,000 and $1,500 a year on heating and cooling. In addition, thermostats account for 10 percent of all U.S. energy use, the equivalent of 1.7 billion barrels of oil annually. The EPA also removed its Energy Star rating from traditional thermostats, so not only are they expensive and inefficient; they're not even up to today's green standards.

The EPA says that a properly programmed thermostat can save homeowners about 20 percent on their energy bills, but with so many controls and switches, current thermostats are difficult to program and fully understand.The Nest Learning Thermostat is the solution to all of these problems, and then some.

In the tradition of Apple, the Nest Learning Thermostat is all about making life easier for the consumer. The Nest Learning Thermostat is extremely easy to use--just turn the outer ring left or right like you would on a normal thermostat, and the screen lights up red when it's heating or blue when it's cooling. As the name implies, the Nest's thermostat learns your preferences within about a week, saving you money by intelligently reducing your energy consumption at all hours.

Thanks to internal algorithms that analyze the user's programming patterns and adapt accordingly, Nest's invention effectively removes users from the equation. The thermostat leverages a Wi-Fi connection to identify the weather outside, and learns how its user affects energy settings under these conditions. The thermostat also comes with motion-tracking sensors that can also detect whether or not people are present in a feature called Auto-Away, so consumers can leave the house unexpectedly--for a few hours or a few weeks--and never need to remember to turn down the thermostat.

Should consumers want to adjust the thermostat while they're out so they can come home to a warm home, Nest has a solution for that, too. The Nest Learning Thermostat is programmable via mobile device, so users can pick up their laptops, smartphones or tablets and adjust the dial like they would at home. Using a thermostat and saving money on energy bills was never so easy.

If Steve Jobs were still alive, he would likely heartily applaud Nest Labs' efforts. The former Apple chairman and CEO had a competitive spirit, but he wanted nothing more than for technology to empower people to innovate for themselves. Nest Labs has done just that, by creating a simple, creative, refreshing take on an old, outdated device that most people ignore, but shouldn't.

Investors have high hopes for Fadell's Palo Alto-based start-up. Nest Labs has attracted Kleiner Perkins Caufield & Byers, Google Ventures, Lightspeed Ventures, Intertrust, Shasta Ventures and Generation Investment Management, an investment firm co-founded by former U.S. Vice President and Nobel laureate Al Gore. Gore is also a member on the board of Kleiner Perkins. Total capital hasn't been disclosed.

Nest's Learning Thermostat is compatible with almost 90 percent of all home heating and AC units, and the company says it takes just 20 minutes to fully install. However, for those too lazy or afraid to set it up, Nest offers professional installation, charging $119 for the first unit and $25 for each additional one. Those who buy multiple Nest thermostats will find they all work in tandem to save energy, but can have personalized temperature settings for different rooms in the house.

Consumers buy an estimated 10 million thermostats every year, and Nest Labs would love a piece of that pie, now dominated by giants such as Honeywell International and Johnson Controls. The company has opened pre-orders for the Learning Thermostat, which the company plans to release in its online store and Best Buy retailers around mid-November.  Fadell believes the Nest Learning Thermostat will pay for itself in a year in energy savings.

Fadell may have left Apple to pursue different innovations, but with the Learning Thermostat, Jobs would be very proud of his former colleague.

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