The residential security market will never be the same, according to a market research firm. In 2012, several MSOs (multiple-system operators) in the USA began offering home automation with security which has altered the perception and demand from end-users, according to IHS. Prior to this, the use of a residential burglar alarm system was often a purchase to protect a property and in many cases, an ‘after the fact’ purchase as a result of a break in. While many reasons exist to why a home-owner may purchase security equipment, the reason is no longer solely security, with many users looking to add additional features which are life safety and convenience driven.
IHS estimated the world market for security devices in traditionally monitored homes [for example – ADT] to be worth about $2.9 billion in 2014, compared with $670 million for smart homes [for example – ADT Pulse]. By 2018, the revenue of smart homes is forecast to top $2.4 billion, according to a recent report from IHS.
These rapid changes to the residential security market have been mostly positive; however, the influx of competitors has dramatically changed the make-up of this industry. Ten years ago, professionally installed, centrally monitored systems were the main offer available to end-users. However, this has changed and today products are offered by monitoring companies, MSOs, electric companies, retailers and DIY (do-it-yourself) equipment manufacturers. According to Blake Kozak, Senior Analyst, Security and Building Technologies at IHS, users can find innovative products from new market entrants such as Google and Apple which until recently did not have an offering for the residential security or home automation space.
So what does this mean for ‘smart’ residential security market? ask the market researchers. For manufacturers, it means despite the increase in competition, the market offers ample opportunity for all due to the current, low penetration rate of smart products. For end-users its means more product-solution and pricing options are available than ever before. Finally for the dealers, installers and monitoring companies, the release of new, innovative products-solutions creates better sales opportunities by being able to better meet customers’ needs and budgets.
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