Google might pull Nest back into its hardware team as connected home rivalry with Amazon heats up

  • Alphabet is reportedly considering folding Nest and Google hardware teams back into the same unit.
  • Nest Labs, which develops smart home products, is currently part of Alphabet's "Other Bets" team.
  • The move might help Google compete better with Amazon, which is encroaching on the connected home market.
Nest Thermostat
Image source: Nest
Nest Thermostat

Alphabet is thinking about bringing Nest Labs — maker of the Nest smart thermostat and other home products — back under its Google hardware umbrella, The Wall Street Journal said Wednesday.

Nest is currently owned by Alphabet but is operated under Alphabet's "Other Bets" product category instead of directly under Google. The company is best known for its line of smart thermostats, but also sells connected cameras, a smoke alarm and a CO2 detector.

While Nest was relatively quiet in recent years, it launched several new products in 2017, including new Nest IQ models of its connected cameras, a more affordable Nest Thermostat E and the Nest Guard home security system.

The move could help it fight against Amazon, which is encroaching on the connected home space with the Amazon Cloud Cam smart camera and a new in-home delivery system called Amazon Key.

Nest has had its share of ups and downs. In June, Reuters reported that Alphabet was considering a sale of its Nest unit in 2016 for about $3.2 billion. Last year, the CEO of Nest, Tony Fadell, departed the company.

Google has increased its focus on hardware — it now sells smartphones, Google Home smart speakers and more — and bringing Nest back under the same roof will make it easier for the two teams to collaborate.

Google and Nest declined comment to CNBC.

Read the full report on The Wall Street Journal.