I'd imagine phoning home heavily subsidizes some of the products through the data produced in aggregate and at the level of the individual through which researc

I'd imagine phoning home heavily subsidizes some of the products through the data produced in aggregate and at the level of the individual through which research can be performed and which may also be monetized in other ways. For instance, Google paid 10x revenue for NEST [0]. Profit is obviously much lower which means that's a very long term investment for the acquirer. But maybe not if the NEST product integrates with other Google products bringing more people into the Google ecosystem, incentivizing people to stay in the Google ecosystem, and providing data for Google to both improve it's ecosystem even for non Nest Users and to monetize with third parties. Now if NEST stayed on it's own, it could integrate with other ecosystems or create it's own or just exist as a standalone product but NEST wouldn't have too much data to sell to increase profits, and wouldn't be able to draw as many conclusions as a company which could integrate their data with other data sources. It could create it's own ecosystem but comfortably living within another established ecosystem will probably bring more users to NEST as ecosystem creation is obviously very much outside the purview of a smart Thermostat. So it sort of makes sense that these products "phone home" even if it's not exactly what we as computer software engineers and privacy advocates might look for in a product. [0] - http://www.businessinsider.com/nest-revenue-2014-1 http://www.businessinsider.com/nest-revenue-2014-1