What Can Smart Thermostats Really Do for Your Home?

There's plenty of talk about smart programmable thermostats from Google and Honeywell International, but what's their real potential?

Jun 7, 2014 at 9:26AM

Many people questioned the $3.2 billion acquisition of Nest Labs by Google (NASDAQ:GOOG) (NASDAQ:GOOGL) this past January. Then again, people are questioning the company's increasing pace of acquisitions of hardware products in general. Say what you want, but it appears Google wants to begin learning our habits when we're connected to the world without staring into a computer or smartphone screen. Google is preparing for the Internet of Things.

Data from the Energy Information Administration demonstrate that the market for programmable thermostats, including top-of-the-line smart thermostats from Google and Honeywell International (NYSE:HON), could be quite large. Only 37% of consumers surveyed by the organization had a programmable central thermostat for heating, while just 29% had the same capability for cooling. Meanwhile, research firm Forrester found that only 2% of American adults with an online presence could remotely access their energy management systems. In other words, smart thermostats could be staring at a wide-open market opportunity representing 98% of potential customers.

Of course, that opportunity means little if smart thermostats aren't easy to understand, install, and value. Is throwing down $250 for the Nest Learning Thermostat really worth its potential benefits? How can Google and Honeywell International successfully market and message those benefits to consumers? And although the market opportunity is massive, how will that affect your portfolio? Let's dive into the details in the following presentation.

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Maxx Chatsko has no position in any stocks mentioned. Check out his personal portfolioCAPS pageprevious writing for The Motley Fool, or his work for SynBioBeta to keep up with developments in the synthetic biology industry.

The Motley Fool recommends Google (A shares) and Google (C shares). The Motley Fool owns shares of Google (A shares) and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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