[defen]

I think you're committing a fallacy that's common when people analyze startups - just because a company "could" do something - based on your outside perception of their resources and goals - doesn't mean that they will. As I'm sure you know, mass-producing a consumer electronics device is an entirely different ballgame than paying a consultant shop $20K to make a working prototype. For an existing player to do this would require strong leadership from the top, in order to get buy-in from every level of the organization; hiring of key personnel who are skilled in a field that is outside the company's core competency; money for salaries, product development, marketing, etc.

Why didn't Intuit just build a better Mint? Or Google a better Youtube? Or Salesforce a better Heroku? Surely they "could" have done those things?

[acgourley]

I understand what you're saying, and I would never have claimed the same about Mint or Heroku (okay, I may have for YouTube).

I think your argument hinges on the square device being complex. Let me break down what's inside:

A piece of plastic, a single sensor, 2 wires, and a 3.5mm jack. That's not exactly "consumer electronics".

And yes there are consultant firms who could drive the entire production of this device, from design to production, for a large company that can't rally the internal resources.