Good question. For me, I’d like to consider if I want Cloud data, at a later date.
Let’s say that Rachio has 2 million units fielded (in the future). If they charged a minimal $20 per year for predictive weather, and had 1M paying customers, that $20M in cash flow would be a very good stream of cash that ‘should’ far and away exceed costs. Good deal for them, god deal for the customers who want that.
Annual pricing has to be “reasonable” so that Customers won’t think about it, and will stay connected, figuratively and literally, to the company.
The hardware, if carefully farmed out to the correct subcontractors, could still provide a very good income (profit) even with, let’s say, a $90 price point, Lower prices mean better exclusion of competitors (important) AND more customer base. In these types of products, the victors have customer base, not necessity the highest profits per sale.
In my case, I want reliable Wi-Fi control to set schedule (only) local device. I don’t really care about weather (yet) as it rarely rains here and we can only water 3x a week anyway (legally). And THAT legal restriction is why I want water schedule controls, not anything else at this time.
So, I see some business areas where Rachio could improve. Of course, I want them to get rich and do well. But I think the entry price is too high and is a bad omen to viability, particularly when there is so much interest in Smart Home products this year. It is a given - in 12 months there will be 5 to 7 competitors and I guarantee 1 to 2 will be as good or better. And many far cheaper.
Granted, cheaper isn’t better, but if I were Rachio, I’d do everything I could to avoid losing the low end of the market. Best Buy and Home Depot will assuredly drop Rachio like a hot rock when the next new, cheaper, higher-margin controller comes out. And it will be out. We are simply watching the clock now. Not “if”… it is “when”!
The COMDEX Consumer Electronics Show, held annually in Las Vegas (January), was swarming with new products in this field. This is no time for Rachio to sit on their laurels.
Good luck to them.