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Home automation system to triple

1.1m home automation systems to ship in 2012

In North America, which represents the lion's share of the global market for managed home automation, more than one million systems are expected to be installed in 2012. That figure - a tripling of the 2008 market - is forecast to nearly double again in 2014.

One significant element of managed home automation packages is security. Traditional security service alarm service providers as well as telcos and cable broadband service providers are now entering the market for managed home monitoring and automation services.

"Managed home security usually represents good value for the consumer," says ABI Research practice director Sam Lucero.

Digital World

"It's something of a ‘plain vanilla' offering, but it is packaged by the service provider in a way that is relatively easy to deliver. Standalone home automation and security systems pose a significant challenge to consumers, in both cost and complexity.

When home automation functionality is included in an overall security alarm package, it is more seamless and less expensive for the consumer to acquire."

And what is the motivation for the service providers? There are a number of drivers:

  • Service providers have existing relationships with their subscribers that facilitate education about home automation's benefits.
  • "Stickiness": service providers are motivated to deploy managed services to increase their revenue and subscriber retention rates. "Revenue is slightly increased," notes Lucero, "but it's not really about that; it's more about customer loyalty."
  • Service providers' efforts are greatly assisted by turnkey solutions suppliers such as InGrid, 4Home, iControl and others, which can help the service providers go to market quickly with compelling offerings.
  • Home security, along with the energy management, healthcare and media management elements of home automation, are more intuitively beneficial to consumers, resulting in greater willingness to adopt.

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