Nest releases its first product in over a year (GOOG, GOOGL)

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Nest, the smart home manufacturer owned by Alphabet (formerly Google) and famous for its connected thermostat, has released an outdoor connected camera designed for home security monitoring, reported Bloomberg.

The Nest Cam Outdoor is the first new product that Nest has released in more than a year and will compete directly with Netgear’s Arlo security camera and a similar product by Ring.

Nest already makes an indoor monitoring camera, the Nest Cam, which it released after its 2014 acquisition of Dropcam. Nest said that about 30% of Nest Cam owners point their Nest Cam out their windows anyway, so the company redesigned the camera for outdoor use.  

The Nest Cam Outdoor sends alerts to the owner’s smartphone when it detects a possible intruder. Nest coupled the new camera with machine learning algorithms that allow the camera to differentiate between a human or an animal that could be roaming the backyard. Nest Cam Outdoor owners can also tap into a live stream from the camera via the Nest app. The outdoor camera is currently available for pre-order and will be released in the fall for $199. The company had been rumored to be working on a smart home security system, so more security devices may follow the Nest Cam Outdoor.

This is the first product that Nest has released since CEO Tony Fadell resigned in June after a string of negative news surrounding the company. Nest failed to release another hit product after the launch of its signature smart thermostat in 2011, and it also failed to meet Alphabet’s revenue expectations. Fadell was replaced last month by former Motorola executive Marwan Fawaz, and the company released an update to its thermostat shortly thereafter that allows it to automatically adjust to changes in energy prices.

At its current state, we believe the smart home market is stuck in the 'chasm' of the technology adoption curve, in which it is struggling to surpass the early-adopter phase and move to the mass-market phase of adoption.

There are many barriers preventing mass-market smart home adoption: high device prices, limited consumer demand and long device replacement cycles. However, the largest barrier is the technological fragmentation of the smart home ecosystem, in which consumers need multiple networking devices, apps and more to build and run their smart home.

John Greenough, senior research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on the U.S. smart home market that analyzes current consumer demand for the smart home and barriers to widespread adoption. It also analyzes and determines areas of growth and ways to overcome barriers.

Here are some key takeaways from the report:

• Smart home devices are becoming more prevalent throughout the US. We define a smart home device as any stand-alone object found in the home that is connected to the internet, can be either monitored or controlled from a remote location, and has a noncomputing primary function. Multiple smart home devices within a single home form the basis of a smart home ecosystem.
• Currently, the US smart home market as a whole is in the "chasm" of the tech adoption curve. The chasm is the crucial stage between the early-adopter phase and the mass-market phase, in which manufacturers need to prove a need for their devices.
• High prices, coupled with limited consumer demand and long device replacement cycles, are three of the four top barriers preventing the smart home market from moving from the early-adopter stage to the mass-market stage. For example, mass-market consumers will likely wait until their device is broken to replace it. Then they will compare a nonconnected and connected product to see if the benefits make up for the price differential.
• The largest barrier is technological fragmentation within the connected home ecosystem. Currently, there are many networks, standards, and devices being used to connect the smart home, creating interoperability problems and making it confusing for the consumer to set up and control multiple devices. Until interoperability is solved, consumers will have difficulty choosing smart home devices and systems.
• "Closed ecosystems" are the short-term solution to technological fragmentation. Closed ecosystems are composed of devices that are compatible with each other and which can be controlled through a single point.

In full, the report:

• Analyzes the demand of US consumers, based off of survey results
• Forecasts out smart home device growth until 2020
• Determines the current leaders in the market
• Explains how the connected home ecosystem works
• Examines how Apple and Google will play a major role in the development of the smart home
• Some of the companies mentioned in this report include Apple, Google, Nest, August, ADT, Comcast, AT&T, Time Warner Cable, Lowe's, and Honeywell.

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The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of the smart home market.