Nest is becoming less popular among residential builders as Google's software changes impede Nest devices' ability to connect with third-party IoT devices
then, bricked it. “When people buy a connected device, they expect it to connect. That's not something that happens with Nest anymore.” Good @GerritD story. https://www.bloomberg.com/...
Context & Ripple Effects
In May, Google dismantled the Works with Nest platform at I/O, replacing it with a Works with Google Assistant program that trades broad compatibility for tighter data control — leaving many existing Nest users on a dead-end ecosystem. Google's answer since has been partial: limited Home Routines and an opt-in Device Access program announced as the old integrations wind down (new home-automation initiatives).
The Bloomberg report shows the bill arriving five months later: residential builders, who specify devices for entire homes, are pulling away from Nest because its hardware no longer reliably connects to the third-party IoT gear those homes are built around. The channel that once made Nest a default is now the first to defect.
First-order effects
- Builders specifying whole-home systems lose a default thermostat and camera choice, since Nest devices can no longer be counted on to interoperate with the third-party equipment they install alongside.
Second-order effects
- Rival platforms that preserved third-party integration become the path of least resistance for new construction, redirecting the builder channel toward competitors' ecosystems.
Third-order effects
- If the pattern holds, smart-home adoption in new construction consolidates around whichever assistant platform controls integration standards, and device makers compete on ecosystem access rather than hardware quality.
The trend: Smart-home platforms are trading open interoperability for walled-garden data control, and professional installer channels are the first market where that trade shows up as lost share.