Why Didn’t Apple Inc. (AAPL) Buy Nest Labs?

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Nest Labs was founded by two former Apple Inc. (NASDAQ:AAPL) executives, Tony Fadell and Matt Rogers. But Apple Inc. (NASDAQ:AAPL) was never really interested in the startup. Finally, Google Inc (NASDAQ:GOOG) acquired the thermostat company for $3.2 billion. Tony Fadell was the key person behind the development of the iPod. Matt Rogers worked on the iPhone and iPad software during his stint at Apple Inc. (NASDAQ:AAPL).

When they founded Nest, Fadell and Rogers began recruiting a number of Apple Inc. (NASDAQ:AAPL) employees. Recently, reports surfaced that many Apple Inc. (NASDAQ:AAPL) engineers working on the iWatch moved to Nest. The startup has a lot of connections with the Cupertino-based tech giant. So, it was a bit surprising to see Nest Labs being acquired by Google Inc (NASDAQ:GOOG). What’s more, Apple Inc. (NASDAQ:AAPL) was never in the race to buy Nest. Why didn’t Apple Inc. (NASDAQ:AAPL) buy Nest Labs? Nobody knows the real reason except, of course, Tim Cook. But according to Jay Yarow of Business Insider, there could be three possible reasons.

1- Tony Fadell’s adverse relationship with Apple design chief

Nest co-founder Tony Fadell and Apple Inc. (NASDAQ:AAPL)’s design head Jony Ive had bitter relations, according to Leander Kahney’s new book on Jony Ive. Kahney said the tech giant paid off Fadell many millions of dollars to leave the company. The company canned Tony because of his bitter relationship with Ive. Fadell stormed into Steve Jobs’s office many times bitching about Ive. But the Apple Inc. (NASDAQ:AAPL) co-founder had a strong relationship and and tremendous respect for Sir Jony Ive. So, he favored Ive rather than Tony. If that’s true, Fadell would never have worked with Apple Inc. (NASDAQ:AAPL) when Jony is still leading the team.

2- Google might already have an exclusivity

Google Inc (NASDAQ:GOOG) has been with Nest Labs since its inception. Fadell said in his blog post that he first showed a Nest thermostat prototype to Larry Page in 2011. Google Ventures invested in Nest Labs in 2011, and again in 2012. During its funding, Google Inc. (NASDAQ:GOOG) might have negotiated an exclusive deal.

3- Perhaps Nest co-founders wanted to join Google

Nest co-founder Fadell left Apple Inc. (NASDAQ:AAPL) after relations soured between them. There have been indications that Fadell wasn’t on good terms with Scott Forstall either. Forstall headed the iPhone software development team at the time.

Why would Fadell want to join Apple Inc. (NASDAQ:AAPL) when Google Inc (NASDAQ:GOOG) has been supporting his startup since the beginning?

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