Home Automation Services a Growing Opportunity for Service Providers

  • Home Automation
SCOTTSDALE, AZ -Traditionally, there have been two types of home automation systems: the economical, do-it-yourself kind and the expensive, custom-designed installation. Both approaches limited the potential size of the market, the first by requiring technical expertise on the part of the homeowner and the second by its expense.

New research from ABI Research suggests that an emerging third model may fuel tremendous growth in the market: home automation as a managed service offered by a broadband provider. With managed services, homeowners can monitor their homes remotely and control basic features such as lighting or air conditioning with a minimum of both technical knowledge and expense. New managed home automation services will both compete with and complement the traditional home security alarm market, says ABI Research.

Practice director Sam Lucero notes, “Traditional security firms such as ADT will increasingly be joined in the mainstream by these new providers offering managed home automation services." Although new managed-service offerings incorporate security alarms (typically with a cellular back-up connection, as is the case also in the traditional security alarm industry), they include a variety of other functions as well. Verizon Wireless announced such a service at CES this year, and Comcast is currently trialing one in the Houston area. ABI Research sees this model entering the mainstream in 2012-2013 once more service providers and consumers become familiar with it.

Analyst Kevin Burden points out, “The key inhibitors are the newness of the technology to the service providers and the newness of the services to potential subscribers; a significant consumer education process will be required, but the telco and broadband providers are well positioned to do it.”

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