what about under the iHome integration platform and division? would have been the perfect "centre" piece. I think Apple missed out bigtime for that.
Most people who have a home, have their thermostat in a very central, uncovered and visible location (sort of a requirement for it to work right). that would have been a fantastic product for Apple to have right there in everyones main halls/living rooms, with a big bright glowing Apple logo on it when you or your guests walk by. It would have been the flagship of their home integration platform.
Apple doesn't have divisions, it has functions. Where would Nest rollup in the org chart below? I can't imagine Tony coming back to Apple and reporting to anyone other than Cook.

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Google Glass wasn't a failure, because it wasn't meant to be a mass consumer device. If it had been, Google would've designed it differently and sold it for under $100 like Chromecast.
Google priced it so high because they wanted the barrier to entry. They didn't want tons of people buying it and freaking everyone out. Google should have targeted it to certain vertical markets where it would have been been useful. My guess is that's how they'll repurpose it.