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My new apartment has a Nest so this is the first time I’m using my phone as a primary magic-wand type controller. Why has phone-as-magic-wand been a slow design pattern to catch on? Cost? Bad UX psychology? Bad design pattern for most applications? Engineering difficulty?
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You're both right, when considering the overall UX. And it is the UX. Consider, eg, difference between Amazon Fire stick vs conventional remote—simply adding volume control is a game changer for Fire's adoption.