Purchase History

CCS Insight Sees More Acquisitions Ahead

Last Friday, Google’s Nest unit announced that it had acquired Revolv — a privately held company that made the Revolv Smart Home Solution, a central hub for connected devices. The $299 product allows owners to control most popular smart home devices including Belkin wall switches, Nest thermostats, Philips Hue light bulbs and Yale smart locks. Revolv supports several of the standards that are currently used in smart home products, enabling otherwise incompatible devices to work together. However, Nest stated that it would no longer sell the Revolv hub, an indication that the company plans to use Revolv’s talent for developing other connected home products.

In mid-2014, Nest purchased Dropcam, the maker of Wi-Fi video cameras which stream feeds over the Internet for home monitoring purposes. Nest itself was purchased by Google for $3.2 billion at the beginning of 2014. It’s been a frantic year of company purchases.

CCS Insight believes that such acquisitions will continue as a matter of routine in the coming years, with big names like Facebook, Google and Microsoft purchasing start-ups and established companies in order to accelerate their time-to-market, provide intellectual property rights and bring talent in-house.

In our Predictions for 2013 and Beyond event (see CCS Insight Predictions for 2013 and Beyond), we forecast that WhatsApp would become a billion-dollar acquisition target in 2013. We expected that Amazon, Facebook or another major player would bid up the price of the fast-growing social media company to eliminate potential competitive threat. In February of 2014, Facebook announced the acquisition of WhatsApp for $19 billion.

In 2009, we outlined a possible acquisition of Motorola by Google (see CCS Insight Predictions for 2010 and Beyond). We understood that Google was eager to expand its in-house portfolio of Android devices to push the platform into the market lead as iOS continued its dominance at the high end when Symbian was showing its age. We weren’t entirely surprised, then, that Google announced in mid-2011 that it would acquire Motorola for $12.5 billion.

Not all of our acquisition predictions have come to fruition, but the justification of each of the predictions remains. More big changes are coming, and industry executives should be prepared for major market shifts.

At the upcoming CCS Insight Predictions: 2015 and Beyond event in November, CCS Insight analysts will again use their industry knowledge to discuss the changing landscape. As predicted last year, 2014 saw a large number of acquisitions (including Microsoft’s recent purchase of Mojang, the company behind Minecraft). CCS Insight believes that the acquisitions trend will continue during 2015, with more buyers coming from outside of the US and Europe. We expect more international acquisitions as Asian players continue to look to establish themselves in Western markets, and will be naming some names next month.

For information about our upcoming Predictions event, to be held on 19 November 2014, please click here.