Wink Has Sold 300k Home Automation Hubs, But Biz is Dying; Whither the DIY Dream?
Quirky and its Wink IoT group are almost out of cash and may not make it, making us wonder what will happen to other DIY home automation initiatives like Staples Connect, Lowe’s Iris and SmartThings.
Wink, the IoT spinoff of GE-backed Quirky, is almost out of cash because you can’t sell $50 home automation hubs and make money.
In just one year since it began shipping product at Home Depot and Amazon.com, Wink has sold about 300,000 units, many of which were given away for 99 cents during Wink’s early days at Home Depot.
In an interview with Fortune, Quirky CEO Ben Kaufman says he thinks Wink could sell $25 million in product this year; however, since Quirky has already blown through more than $170 million, and has enough reserves to last only a few more months, we may never know Wink’s potential.
Kaufman tells Fortune that Quirky/Wink has about $12 million in cash but a huge amount of debt. He doesn’t believe creditors want to force a default though.
Quirky must raise at least $15 million to keep both entities alive, or else sell the businesses, according to another Fortune interview.
Who would buy it, anyway? Users tend to rank the product as so-so when compared to Samsung’s kind-of-comparable SmartThings. And the market is looking at Wink’s once-high-profile classmates Staples Connect and Lowe’s Iris and not seeing dollar signs ... or products on shelves.
Wink’s launch partner Home Depot, as well as Staples and Lowe’s, have seemingly re-thought plans for their in-store home-automation real estate.. The big kiosks and interactive displays planned for so many stores either have not materialized or have been scaled back to little more than a row of boxes on a couple of shelves.
Today I visit the new flagship home automation shops at Sears and Target in the San Francisco area. A full report on these initiatives next week …
As I have maintained all along: multipurpose DIY home automation hubs may do well in homes with smart-home enthusiasts, but they are not (yet) ready for the non-techy masses.
On a side note, here’s a very big lesson for those seeking big-box distribution: The more stores you sign, the more products you have to make and ship. Being in some 50,000 stores, Kaufman says, required the company to produce tens of thousands of units for every new product, even those that would eventually flop.
That is a very expensive proposition.
UPDATE: An earlier version of this article indicated that Lowe’s had decreased its shelf space devoted to Iris, A Lowe’s spokesperson tells us, “Lowe’s is not reducing shelf space for Iris and in fact, we’ve done the opposite by completing our nationwide rollout.” Iris end caps are now in 1,500 stores.
Meanwhile, Home Depot reached out to say (not surprisingly), “Wink has been a great vendor partner and we look forward to our continued relationship with them.”
Video: Quirky CEO Ben Kaufmann on the problems with Wink home automation.
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Julie Jacobson, recipient of the 2014 CEA TechHome Leadership Award, is co-founder of EH Publishing, producer of CE Pro, Electronic House, Commercial Integrator, Security Sales and other leading technology publications. She currently spends most of her time writing for CE Pro in the areas of home automation, security, networked A/V and the business of home systems integration. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, earned an MBA from the University of Texas at Austin, and has never taken a journalism class in her life. She's a washed-up Ultimate Frisbee player currently residing in Carlsbad, Calif. Email Julie at [email protected]
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