Nest is known as a newborn company that reinvents ordinary household systems like thermostat into something revolutionary after introducing its successful product of the Nest Learning Thermostat. By targeting the same niche market segment consisting of ‘green’ customers and technology lovers, Nest released Nest Protect, a smart and sleek smoke and carbon monoxide detector that connects with home wifi network and can be used seamlessly in conjunction with the Nest Learning Thermostat.

The ultimate goal of Nest for introducing this new product is to create new demand in a very saturated market of smoke detectors. There is still a big gap in this market as most customers are usually not satisfied with the smoke detectors installed in their homes. Many customers may have experienced annoying false alarms, or the low battery ‘beep’ at the middle of the night when they are resting. Nest saw this opportunity and created a smart smoke alarm that has many cool features, including waving at the unit to quickly silent in case of false alarm, the ability to notify any problems to users’ smartphones, and nightlight mode.

By applying the product life cycle, the Nest Protect is currently at its introduction stage. It is normal to expect low level of sales revenue at this stage. However, by being first in the market, Nest has the first mover advantage to capture and possess the early market share lead. But as the product is fairly easy to ‘copy and paste’, Nest must be aware of the competition from the imitators as the its product goes through the product life cycle. Also, by applying the diffusion of innovation curve, the main group of customers is most likely to be the innovators. Even if the innovators are only around 2.5% of the total market, they crucial for the success of the product as they help the product gain acceptance in the future through positive word of mouth.

Nest is doing a very good job in promoting its new product and delivering the value to customers. However, this is just a beginning of the journey of Nest Protect. The biggest complaint for this product, however, is the price. Nest Protect comes with a price of US$125 while regular smoke detectors range from $15-$80. Even though the product may be much more expensive than the alternatives available, I believe this product will be a significant premium product that may eventually be widely used in (digital-age) households.