SAN FRANCISCO — Embattled Nest CEO Tony Fadell is stepping down from the Alphabet-owned smart home device maker.
Fadell is being replaced by Marwan Fawaz, former executive vice president of Motorola Mobility who had served as CEO of Motorola Home.
Alphabet made the surprise announcement after the market closed Friday.
Fadell, who has come under fire for his leadership style, said he began discussions with members of his team about his next endeavor last year.
His departure brings to a close two turbulent years at Google which bought the company for $3.2 billion, its third-largest acquisition.
Fadell cuts a high profile in Silicon Valley as the executive instrumental in developing Apple's iPod and designing the iPhone. He started Nest in 2010 to create a fleet of smarter gadgets for people's homes.
"After six years of working on Nest, leading it through 4.5 years of double-digit growth and consistently high marks from customers, I leave Nest in the hands of a strong and experienced leadership team, with Marwan at the helm and a well-defined, two-year product roadmap in place," Fadell said in a statement.
Fadell will serve as an adviser to Alphabet and CEO Larry Page, according to the company.
"I’m delighted that Marwan will be the new Nest CEO and am confident in his ability to deepen Nest’s partnerships, expand within enterprise channels, and bring Nest products to even more homes," Page said in a statement.
Alphabet is clearly banking that Fawaz can end the tumult that has distracted Nest management and employees.
In Fawaz, Nest has a very different, less flashy leader. Fawaz has solid credentials in the cable TV industry veteran working for such operators as Charter Communications and Adelphia Communications and rubbing elbows with the likes of Liberty Media's John Malone and Comcast's Brian Roberts. Most recently he hails from Sarepta Advisors, a tech consulting firm he co-founded.
He's also a known quantity to Google. When Google bought Motorola Mobility in 2012, he was tapped to run the Home unit, which supplied cable TV set-top boxes to cable operators and was sold to Arris Communications. He recently served as an adviser to Google Fiber, according to technology news outlet The Information.
In Fadell, Google thought it was getting a visionary hardware executive to guide its strategy of reaching people in their homes.
Nest became part of Alphabet’s new corporate structure last year with Fadell tasked with running the subsidiary independently from Google.
The company suffered setbacks such as a smoke and carbon monoxide detector being recalled. And new product releases were slow. In recent months, Nest employees complained publicly about Fadell's abrasive leadership style. Articles in technology news outlets The Information and Recode detailed other problems inside Nest, leading to delayed products and disappointing sales.
Among Fadell's biggest detractors was Greg Duffy, the former CEO of Dropcam, which Nest bought for $555 million in 2014. Duffy said he regretted selling Dropcam to Nest, citing "extreme differences" in management styles.
"Given the apparent tension between him and the Alphabet management over increased financial discipline on the one hand, and employee complaints on the other, his position was becoming pretty untenable, so it’s probably a good thing that he’s going," said Jan Dawson, chief analyst with Jackdaw Research.
Fadell's replacement may signal a change in direction for Nest away from a retail sales strategy, Dawson said.
"To my mind, one of the most interesting things is that his successor appears to have very little experience in retail or consumer electronics. He’s a guy that’s mostly sold products indirectly to consumers at best," Dawson said.
A shift in strategy could be "very sensible," he said.
"The retail model for the smart home seems pretty stuck right now, whereas the smart home as a service model seems to be doing rather better, and so Nest seems to be pivoting to the more promising part of the market," Dawson said.
In April, Google formed a new division for all of its hardware products and recruited Rick Osterloh, the former president of Motorola, to run it. Osterloh, who left the Lenovo-owned handset maker in March amid a major reorganization, reports to Google CEO Sundar Pichai. The move was intended to unify Google's hardware products across the company and sharpen Google's focus on their development. Osterloh oversees everything from Google's Nexus devices to the Internet-connected eyewear Glass to the new Echo competitor Google Home.
