Google Dives Deeper Into The Internet Of Things

To no one’s surprise, Google unveils plans to leverage its multi-billion dollar Nest acquisition in a push to dominate the Internet of Things.

Jun 25, 2014 at 8:00PM

Few buzzwords are more passé in tech circles these days than the Internet of Things. As corporate giants and fledgling start-ups alike have taken notice of this major opportunity, we've been seemingly inundated of late on strategies to cash in on this emerging trillion-dollar trend.

Nest Logo

Source: Nest

And even though hearing about it may get old, it's beyond dispute that the Internet of Things isn't just some flash in the pan. It's the real deal, and investors should be paying attention to it and strategizing ways to tap into its growth. And in that vein, search giant Google (NASDAQ:GOOG) (NASDAQ:GOOGL) recently made a major move in its IoT landgrab.

Google makes Nest open source; surprise, surprise
When Google acquired smart thermostat start-up Nest Labs for over $3.2 billion earlier this year, many interpreted the move as Google's entry point into the broader Internet of Things phenomena, a call that now appears spot on. In a blog post on the company's corporate blog, Nest co-founder and head of engineering Matt Rogers recently introduced Nest's new Nest Developer Program, which opens Nest's leading smarthome platform to third-party developers. Take a look.


Source: Nest Labs

The 30,000 foot view here is that Nest will establish a common API that developers can use to connect their software or hardware into the broader ecosystem in order to deliver streamlined experiences for users in the home. The blog post enumerates a number of use-cases, one of which is with the popular Jawbone wearable. Thanks to Nests new open IoT platform, a users' Jawbone UP24 band can sense what time a user wakes up based on their increases in motion, which can trigger the Nest thermostat to adjust a users' home temperature to their preferred settings. Other partners Nest mentions in the blog post include smart lightbulb company LIFX, Mercedes-Benz, and Whirlpool with many more expected soon.

Serious money on the line
For both Google and Apple (NASDAQ:AAPL) there's a significant financial imperative to establish their already-dominant mobile ecosystems around the Internet of Things, and that's just what we're seeing from Google with this move. Similarly, Apple unveiled its HomeKit software at its Worldwide Developers Conference several weeks back with nearly the same intention.

It's still the early innings for the Internet of Things, but both Apple and Google know full well that the IoT is poised to become a key driver of innovation and growth for decades to come. Moreover, the companies that can position themselves as the consumer hubs for third-party applications will dominate this market. With their dominant mobile ecosystems already in place, Apple and Google enjoy pole position as the front-runners most likely to dominate the IoT consumer application market.

From an investors' perspective, it doesn't take an overly active imagination to envision the kind of growth market dominance this emerging field could lead to for Apple and Google. In Google's case, think of the tremendous data advantages and display advertising targeting that could arise from the reams of data that consumers generate from their homes.

Likewise, Apple implementing an App Store-like revenue structure, in which Apple receives 30% of gross revenue from digital content sales, could also prove a boon as the smart home is likely to usher in a proliferation of new apps for consumers to purchase. So while the Internet of Things remains in its nascent stages, it's nice to see Apple and Google making big bets on this budding tech growth engine as we saw once again today.

How to cash in on tech's other big-ticket growth market
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Andrew Tonner owns shares of Apple. The Motley Fool recommends Apple, Google (A shares), and Google (C shares). The Motley Fool owns shares of Apple, 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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