“There’s this huge opportunity in intruder alarms and we’ve seen the penetration rate increase. Residential security is growing much faster than commercial at the moment and my question is they’re making the building blocks to penetrate this market, why would they not? It wouldn’t make a lot of sense if they decided not to get into the market, like if they decided to get into the home but draw the line before they get into a huge growth opportunity.”
Pavlovic said that although the products currently offered by Nest are very “niche,” other industries, including the fire market, are paying close attention to their level of success because they’ve never offered a device like the intelligent smoke/CO detector that Nest provides because they never envisioned someone paying that amount of money for one.
“Smoke detectors are not necessarily a luxury, they’re a necessity,” said Pavlovic. “I’m really more curious about what the reaction is going to be from the end user. I’m sure the distributors are eager to partner with (Nest) because that kind of puts them on the map and opens them up to a higher-end customer base that’s willing to spend on these products.”