Because people won't pay (or the companies(' research) don't think they'll pay) much for the hardware, so it's a loss leader or barely profitable promotion for

Because people won't pay (or the companies(' research) don't think they'll pay) much for the hardware, so it's a loss leader or barely profitable promotion for the subscription service. Not that straightforwardly in Nest's particular case to be fair, but a lead in to other products, and Nest was perhaps bought by Google before having to worry too much about profit margins(?).