Flash analysis: the implications of the Honeywell-Nest lawsuit

1Executive Summary

The thermostat — a household gadget that never used to get much respect — is now grabbing the attention of the tech community because of a lawsuit filed last week by industry giant Honeywell against Nest Labs, a Silicon Valley startup that has used its connection to Apple cleverly to promote its smart thermostat technology. The lawsuit has caused an intense debate on not only the merit of Honeywell’s claim but also the impact the legal fight might have on innovation in the smart thermostat space (will it stifle or protect it?). And, of course, the fate of Nest is now unclear.

It was only this past fall when Nest started talking about its technology and ambition to remake the old thermostat market by giving the device the ability to learn the behavior and preferences of its owner and automatically adjust household temperatures accordingly. The company boldly claimed it had developed the “world’s first learning thermostat.” Now that claim is in dispute.

We conducted a survey right after Honeywell announced the lawsuit and asked GigaOM readers for their views on what will likely be a nasty legal tussle between the two companies (and, yes, we promise to avoid the whole “David vs. Goliath” cliché in this report).

This research note examines the survey’s results. It also includes an analysis of Nest’s emergence and Honeywell’s legal move in a market that is not only about thermostats but also about devices that could relay and maybe even manage energy production and consumption data of each household, as well as the so-called Internet of things, a network of connected devices.

We end this report with a collection of thoughts from survey respondents.

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