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Google Strengthens Its Position in Smart Home Solutions Through This Move

June 21, 2014 | About:
Quick Pen

Quick Pen

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Last month, Apple’s (AAPL) stocks soared as rumors about a smart home solution surfaced. But the Cupertino based tech giant is not the only one looking to grab a share of this new segment. Mountain View based Google (GOOG), through Nest Labs’ internet-controlled thermostats and fire alarms, was already warming up the space. And now the tech bellwether is in talks to acquire Dropcam, a startup that specializes in cloud-based Wi-Fi video-monitoring and security.

About the deal

The move from Google comes as another step towards its dream of becoming the foremost player in the world of converged devices – ranging right from a smartphone, to smart home solutions and even automobiles.

Dropcam was founded by Greg Duffy and Aamir Virani back in 2009 and till date has raised close to $48 million through three levels of funding from venture capitals. The company is backed by Accel Partners, Menlo Ventures, Mitch Kapor, David Cowan, Aydin Senkut, Ben Narasin, Institutional Venture Partners and Kleiner Perkins Caufield Byers.

The acquisition will come through Google’s home automation company Nest Labs. Sources close to the matter said the deal was complete put in place by Nest, which obviously kept Google’s vision in mind. The company will have to part with a sum of $555 million in cash for the acquisition. As a part of the deal, Dropcam will shift its functioning from San Francisco to Palo Alto, where Nest is headquartered. However, though confirmed, the deal is yet to close and is awaiting regulatory approvals.

How Dropcam Fits in to Google’s Plans

Nest has come a long way since its $3.2 billion acquisition by Google and after the Dropcam acquisition, the company will become a stronger player in the segment. Nest will integrate the expertise acquired from Dropcam into its current line of smart home solutions such as Learning Thermostats and Protect smoke detector.

Dropcam’s business offerings are mainly three products – Dropcam, the basic offering that sells for $149; Dropcam Pro, the flagship offering that sells for $199; and Dropcam Tab, a motion detecting device that aids the use of both Dropcam and Dropcam Pro, and sells for $29. The focus of Dropcam’s offerings is to enable its users to remotely monitor activities at home through cloud-based video and audio support and motion sensors. The company also offers features such as video sharing with friends and also making the video public through social networking platforms to share it with the world.

Dropcam and Dropcam Pro. Source: Dropcam Website

With features such as these, Nest can think of developing better devices aimed at providing the best in class security features. The consumer electronics space is evolving faster than ever and people want to be connected with everything that matter to them. Apple has already started working on smart home solutions that will be controlled through iPhones and iPads and will allow users incredible amount of flexibility. Unless Google bucks up and starts strengthening its service, it might fall back in the race.

Google is planning to build a world surrounding its devices that will provide its users with seamless integration between all smart devices. A person sitting in this office will be able to check whether his aging mom and dad are fine at home, whether the baby sitter is tacking proper care of his child or not, if someone has broken into his house or not. He will be able to record videos and also interact through voice streaming, he will be able to inform the nearby police station, and all this will be possible through his Android powered devices. Smartphones and tablets will pave the path for the future of all the tech giants and it will be these new-age services and their effectiveness that will decide which tech mammoth will win the space.

Departing Thoughts

The move from Google seems to be a logical one and something that was being expected. While some industry experts are excited about the ongoing developments, some are highly concerned about the repercussions of such developments. Analysts are expressing their concerns over privacy issues and are worried the big corporations might end up invading user privacy. However, Nest has confirmed the Dropcam will come under Nest’s privacy policy and thus Google or any other company won’t have access to the data without user permission. In my opinion, if Nest and Google and all other companies in this field can take care of the rising concerns over privacy, the tech gurus will be able to surely flourish through offerings such as these.

About the author:

Quick Pen
A seasonal writer with a Management Degree in Finance and interests in automotive, technology, telecommunication and aerospace sectors.

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