June 3, 2016 / 8:34 PM / 3 years ago

CEO of Alphabet Inc's Nest unit steps down

(Reuters) - Tony Fadell, a well-known Silicon Valley executive who was once expected to play a central role in Alphabet Inc’s hardware efforts, has stepped down as chief executive of the search giant’s Nest unit, the company said.

Honoree and founder of Nest, Tony Fadell, arrives at the Time 100 gala celebrating the magazine's naming of the 100 most influential people in the world for the past year in New York April 29, 2014. REUTERS/Lucas Jackson

Fadell will remain an adviser to Alphabet and Google co-founder Larry Page. He will be replaced at Nest, which makes smart thermostats and smoke detectors, by Marwan Fawaz, who had prior stints at Motorola Mobility and Charter Communications Inc.

Google bought Nest in 2014 for $3.2 billion, one of the company’s largest acquisitions ever.

In a blog post announcing his departure, Fadell said Nest’s revenue is growing 50 percent a year and boasted that “the connected home went mainstream because of Nest.”

“We’ve created a hardware + software + services ecosystem, which is still in the early growth stage and will continue to evolve to move further into the mainstream over the coming years,” Fadell wrote.

Fadell started Nest in 2011 after a high-profile run at Apple Inc, where he was an important player in the development of the iPod and the iPhone. Top-tier venture capital investors including Kleiner Perkins Caufield and Byers and Google Ventures backed Nest, which set out to build a smart thermostat and related products.

But Fadell and Nest have had a bumpy ride under Alphabet.

Nest had to recall a smoke detector in 2014 for a software defect that caused a safety risk, and critics said it was slow to roll out new products.

The $555 million acquisition of webcam startup Dropcam did not go well, with Fadell openly criticizing the quality of the team in a news report earlier this year in the trade publication The Information. The story aired numerous complaints about Fadell’s allegedly abrasive leadership.

Dropcam co-founder Greg Duffy responded with a blistering blog post in which he accused Fadell of “blatant scapegoating” and said he regretted selling the company. Duffy also said there had been a huge exodus of employees from Nest.

Fadell said in his blog that he had been planning to leave since late last year. He did not say what he intended to do next, though he recently unveiled a new company, Actev Motors, that makes a smart go-cart for kids.

In a statement Friday, Page called Fadell a “true visionary” and praised his accomplishments at Nest.

Reporting by Narottam Medhora in Bengaluru; Writing by Jonathan Weber; Editing by Maju Samuel and Cynthia Osterman

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