Quentin Hardy for the NYT, quoting Tony Fadell of Nest Labs:

“We can gather all that data, mix it with other data we store in the cloud, and push different algorithms to different houses to see how people react.”

That approach, continually testing one feature against another and going with the one that consumers respond to best, is called A/B testing when done with Internet software. It is how Google and others make their products. As more physical objects fill up with software and develop two-way interactions with the network, Mr. Fadell says, they can be developed the same way.

We’re going to see a lot of this, with all the up- and downside. I wonder whether traditional manufacturers are ready for this…