Earlier quoted context omitted.
Boss: We introduced Hue back in 2012 w/ a plan to lose money the first 3 years developing the hub, subsidizing partners, and getting our product out in the market. Tell me we're seeing a positive ROI now. Hue PM: Hue is profitable, but only marginally so. Our strategy of making up the initial investment on $60 per bulb hardware is being undermined by cheap 3rd party lighting fixtures. Plus we're incurring costs respo…
That doesn't seem like a fair view of the analysis. If the real value was in the hub, and these other lights were getting a free ride on it, then the opportunity would be to charge more for the hub. What is far more likely to be the case is that the support costs around problems caused by random third party components messing with the Zigbee network were exceeding the value of providing that support, particularly whe…
Even they have elevated support costs, Philips's made their bed by offering compatibility in the first place for many years. If they want to remove it, they really should introduce a new model ("Introducing Hue 2.0: Now with less bulb compatibility!") and leave the existing customers unaffected.