zlacker

> Sadly there is no money in home automation unless you can force them into your SaaS service. Making a good product and selling it once just doesn't get Wall Street excited anymore.

Cloud servers cost money to run. Security updates cost money. Firmware updates cost money. Mobile apps have ongoing costs, you can't just release an app into the stores and have it keep working, Google and Apple keep demanding updates.

One time fees on low margin consumer electronics is not a sustainable model.

>>com2ki+(OP)
I'm pretty sure the margin is not low on Hue lights and switches. They are not cheap.

And surely an app can keep working with minimal updates, I don't see that as a huge expense for Hue.

>>com2ki+(OP)
All of these can be predicted, more or less, over expected product lifetime and added to initial product price. Nothing stops from manufacturer to say "10 years of security updates" on a box, and then you're on your own.

>>precom+Lv
Right, but very few customers are willing to pay that upfront price to avoid a cloud service. Most consumers don't care.

>>precom+Lv
And then you lose out to the competitor who only factors in 2 years of updates. Who then loses out to the competitor who doesn't factor in costs at all.

And then suddenly that last company finds itself successful and needs a plan to actually stay in business, so they update their EULA and start pushing a subscription service.

Or, more commonly, they just go out of business.

>>exodus+Qd
I had friends who worked on a very popular consumer electric device before who revealed the ugly economics of it to me.

Cost to build, around $7. Retail price, over $30. Profit for the company, around $3.

Distributors and retailers took the remaining.

Selling stuff in physical stores is a nasty business. I remember these numbers whenever I see people complain about app stores taking a 30% cut.