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Apple Inc. (AAPL) Goes to War, Stops Selling Nest from Google Inc (GOOG)

Apple inc tim cook wwdc 2015 watchApple inc tim cook wwdc 2015

Apple Inc. is in the news after it removed Google’s Nest Learning Thermostat from its stores. On Wednesday, Fortune reported that Nest products have been removed from Apple Stores online and in physical locations. Mashable confirms the news yesterday in a post showing that Apple stores no longer carry Nest products.

Apple inc tim cook wwdc 2015 watchApple inc tim cook wwdc 2015

What is Apple Up To?

It appears that Apple’s decision is designed to make room for devices that work with Apple’s HomeKit. HomeKit is the firm’s home automation hub. It is made to control the Internet of Things (IoT) such as connected lights, speakers, scales, security systems, and more. Nest products are compatible with iOS but not with the HomeKit framework, and the fact that HomeKit is the new kid on the Apple block works against Nest.

In place of Google’s Nest products, Apple is bringing in new devices that are compatible with HomeKit. One of such products is the Ecobee 3, a Nest rival made by a Canadian firm. However, the long-term position might see Apple rolling out its own branded products in the next couple of months.

Apple  has trodden this path before when it removed Fitbit product from its stores before the Apple Watch hit the stores. Apple also did the same thing with Bose headphones after it closed the deal for the purchase of Beats.

The Apple-Google Rivalry

You’ll remember that Google bought Nest for $3.2B in 2013; hence, Nest is simply a Google product. Selling Google’s product in Apple Stores doesn’t really look smart from the business side of things. There’s a sense of endorsement for any product sold in Apple Stores, the firm will be unwittingly endorsing a competitor if it continues to carry Nest products on its shelves.

Apple’s loyal fan base and the “undecideds” will start buying these products for no other reason other than the fact that they are sold by the firm. Tim Cook seems to have adopted the strategy of “Out of Sight, Out of Mind” and Homekit products now have a chance to leave an impression on consumers.

Will HomeKit Live Up to Expectations?

HomeKit needs to deliver a superior experience than what is obtainable on the Nest system. If HomeKit fails to meet expectations, its devices would just occupy shelf space without generating income for Apple. The failure of the HomeKit might cause the Apple [qm q=”AAPL” m=”NASDAQ” c=”Apple”] decision to eliminate Nest to backfire as a shallow move.

The world would have significantly better technology, if both companies will (God forbid) play nice. That is not likely to happen in the nearest future; hence, everyone heads to his camp as Google prepares its own revenge on Cupertino.

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Victor Alagbe is a seasoned business and finance writer with a specialty in writing about how to invest for the long-term in healthcare, pharmacology, energy and tech stocks. His long-term focus is on stocks that provide a nice mix of growth and income. For the short term, he passionately writes about trading stock options for the excitement and leverage that stock options offer.

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