Why Have Our Prices Gone Up?

Starling is a US company. Our entire team is based in the US, and we design, assemble and fulfill our products in the US. We are, as they say, as American as apple pie.

As a consumer electronics company, like almost all others (including Apple), we rely on component suppliers around the world to provide key parts of our products. For example, our hardware design is based around an Allwinner SoC (which includes a CPU, GPU and VPU for video transcoding) that is commonly used in US video products like set-top boxes, which is designed and manufactured in China. Our flash memory used for internal storage is sourced from a US supplier, who sources chips from manufacturing facilities in multiple countries including China and Malaysia. To produce those chips, those facilities in turn purchase raw materials from many other countries. So, like any electronics hardware company, we are dependent on a functional and cost-efficient global supply chain to build products that meet our customers' needs and deliver those products at an affordable price.

Unfortunately, the global trade landscape is currently undergoing major disruption due to US government tariffs being levied on US companies like us. These tariffs are unavoidable: there are no US-based suppliers for all of our components, who manufacture entirely in the US and who do not use any foreign materials. (For example, many materials required for semiconductor fabrication are not naturally found in the US.) These tariffs have recently been increased to extreme levels. For example, for each component shipped to us from China, we currently pay a 104% tariff, which means that for each dollar we pay a supplier for a component, we now also have to pay the US government $1.04 as a tariff.

As a hardware company, our margins are small (meaning that we sell our products for only a little more than they cost to produce), and so our profits come from making a little money on lots of sales. The current tariffs in force dramatically increase our costs: at our previous $99 product price, we would be losing at least $10 every time we sold a hub. And so, like all vendors, we have no alternative but to increase our prices to cover these costs. With the current tariffs in force, our new price of $129 is unfortunately the lowest sale price possible without us operating at a loss and going out of business.

Tariffs are a lose-lose situation: they are bad for our customers, who now have to pay more for our products, and they are bad for us, because higher product prices means fewer customers can afford our products, leading to a drop in sales volume which in turn puts pressure on our ability to operate.

Since 2019, Starling Home Hub has expanded from supporting 2 Nest products (Nest Thermostat and Nest Protect) to over 3000 Nest and Google Home-compatible products. So, we believe that, at the new $129 price point, our Home Hub still offers great value for customers who are looking for a unified smart home experience. We hope that enough customers agree so that we can continue to operate a viable business in this new, unprecedented geopolitical climate.

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