Many Winners Will Emerge from Thermostat War

Honeywell has been one of the leaders in this segment since they introduced the round thermostat in 1953. However, over the last couple of years, the thermostat buzz has circled around Nest and its founder and CEO Tony Fadell. He had managed the iPod line for Apple in a previous life and designed a pretty slick looking thermostat. Sure, there was some grumbling about how Nest was distributing the product, but there was no doubt they created a buzz from the general public — which this industry often tries to do, but rarely succeeds. Even some of my friends who do not know what HVAC stands for had heard about the Nest thermostat.

Lyric

I am pretty certain the latest Honeywell thermostat — Lyric — will create a buzz also. It has many bells and whistles on it. Perhaps the most interesting feature is that it can detect if a homeowner is home or not and will adjust the temperature accordingly. This happens with the Honeywell app on every smartphone in the house. When the last smartphone leaves, the system knows the house is empty and adjusts the temperature. The reverse happens when the first phone arrives back home.

The big picture item of all this is that Honeywell and Nest, along with a slew of other thermostat manufacturers, are pushing the industry toward a greater foothold in the home automation sector.

As the HVAC industry looks to continue to grow — or, more importantly, not get left behind — the importance of this can’t be underestimated. You have to look no further than the fact that Nest was purchased by Google or that Honeywell is working with Apple’s new HomeKit Accessory Protocol, which was introduced a few weeks back. Honeywell leadership was pretty quiet when I inquired about what their involvement in the HomeKit will look like, but, regardless of the company’s role, partnering with Apple is a pretty exciting situation.

With homes getting more and more connected, it does not take a rocket scientist to realize that HVAC manufacturers are envisioning the day when their apps are controlling items such as lighting and security alarms in a majority of homes.

Who benefits from this thermostat arms race? The old saying is “a rising tide lifts all boats.” One big winner will be the HVAC contractor who will be able to sell and install these smart products. Would Honeywell have made such a cutting-edge product without the market pressure emerging from Nest’s buzz. It doesn’t matter; it is a good thermostat war, and here is why.

I know that since I started reporting on this industry 10 years ago, I have often heard people complain about the industry not getting enough respect or interest. For the younger generation, thermostats might turn that around. It might actually make HVAC cool — although I am considered old by some, and am pretty sure the word cool is not cool anymore.

A lot of features of a smartphone are not necessary, but they are convenient and sometimes fun. Managing the temperature in your home can be one of those things.

If thermostats get people talking about furnaces and air conditioners, or even drive a few graduates to this industry, the entire industry will be better off. Maybe these products will be the industry’s version of granite countertops.

There are a number of sophisticated thermostat products available today, and you can expect more to come. Contractors need to be sure they are well-versed on all the new thermostats in the market so they can talk intelligently when their customers start getting excited about the technology. Because odds are those homeowners have done their research in this area.

Publication date: 6/30/2014

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