Smart Homes and Home Automation

NEW YORK, July 5, 2011 /PRNewswire/ -- Reportlinker.com announces that a new market research report is available in its catalogue:

Smart Homes and Home Automation

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Executive summary

Smart homes and home automation (HA) technologies have been around for two or three decades. These technologies have been a niche segment either for the very affluent, or extreme technophiles who wanted to do a few things like control their lights or window shades remotely, or stream audio-video content between rooms, or do some basic home monitoring. Initial HA systems focused on security and utility management, but newer all-inone systems give users real-time control over almost all the systems in the house while at home or away, resulting in a smarter and more energy efficient home tailored to the homeowner's lifestyle. Berg Insight sees a new day dawning for this industry due to a perfect confluence of key market, regulatory, strategic and technology trends. First is the pull from consumers who desire to use products such as iPhones and iPads to control and enhance their lifestyles with the touch of a button on user-friendly and intuitive interfaces. The regulatory drivers come from governmental directives, whereby countries and utilities are mandated to better control the generation, distribution and consumption of power in residences.

The strategic push comes from new powerful entrants into this space such as broadband providers who are already inside consumers' homes and are looking for the next growth opportunities to increase ARPU, reduce churn and become solutions providers rather than just "dumb-pipes". In the US, broadband companies such as AT&T, Comcast and Verizon have shown their hand as they have made recent strong advances into this space. Finally, the technology is coming together with increasing focus on standardization and interoperability, even as the cost of modules, chipsets and software is trending down. It is important to understand the different possible gateways and business models into the smart home from broadband and wireless providers, utility companies, consumer electronics manufacturers, retail outlets, to traditional security and home automation suppliers, distributors and dealers. It is also important to differentiate the different dynamics between the luxury homes segment versus the mainstream, as well as the complexities involved in retrofit of existing housing stock, versus new home construction.

Companies also have to strategize whether they wish to offer standalone smart homes technologies, or move towards multifunction whole-home systems. For the last couple of years, many home automation companies have struggled. Part of the reason is that the convenience and comfort functions offered by HA systems are not critical or essential and thus suffer when the financial and economic picture is gloomy. A second reason is that the best time to install a HA system is during new home construction, but new construction has been at a virtual standstill in many regions. Usually the large homes segment is immune to economic fluctuations, but this time the malaise has been so widespread that even the high-end segments have been affected. There will continue to be short-term challenges for the HA industry. The economic and housing gloom could stretch out much longer than currently envisaged. Other challenges include lack of awareness of HA offerings and the fact that consumers in many segments do not see a strong reason for HA systems.

The costs involved in terms of equipment, installation and ongoing maintenance and service, are all perceived as deterrents. However, there are signs of economic growth and increased residential construction in many parts of the world. In addition, new initiatives such as Google's Android@Home can bring increased consumer awareness of HA systems and facilitate interoperability between equipment from multiple vendors. Berg Insight forecasts that global revenues from shipments of home automation systems will grow at a compound annual growth rate (CAGR) of 33 percent from US$ 2.3 billion in 2010 to nearly US$ 9.5 billion in 2015. These numbers include all 3 categories of home automation: professionally installed, Do-It-Yourself (DIY) and the more recent category systems installed by broadband and utility service providers. Significant revenue contributions will come from retrofit of existing homes, both luxury and mainstream. The home automation industry is also opening up a new potential market for cellular M2M devices and services. Berg Insight forecasts that the number of cellular connections used by home automation systems worldwide will grow at a compound annual growth rate of 85.6 percent from 0.25 million in 2010 to 5.5 million connections in 2015. The vast majority of these are security and access control systems. Shipments of cellular M2M communication units for home automation systems are forecasted to grow from 0.2 million units in 2010 to 1.8 million units in 2015.

Table of Contents

Table of Contents i

List of Figures vii

Executive summary 1

1 Smart homes, connected homes and home automation 3

1 1 Introduction 3

1 2 Types of home automation 6

1 2 1 Energy management and climate control systems 6

1 2 2 Security and access control systems 10

1 2 3 Lighting, windows and appliance control systems 11

1 2 4 Audio-visual and entertainment systems 13

1 2 5 Healthcare systems and home monitoring 13

1 2 6 Pool, spa control, sprinkler, fountains and miscellaneous 14

1 2 7 Multifunction and whole-home home automation systems 14

1 3 Market drivers and barriers 16

1 3 1 Market drivers 16

1 3 2 Market barriers 17

2 Home automation market segments 19

2 1 The custom (luxury) segment 21

2 1 1 The luxury segment is not immune to recessions 21

2 1 2 Customer identification methods 22

2 2 Mainstream (production) segment 23

2 2 1 Single-family detached homes 23

2 2 2 Multi-family dwelling units (MDUs) 25

2 3 New homes versus existing homes 26

2 3 1 The new home HA segment is affected by the fall in new home construction 26

2 3 2 The existing home market is the growth segment 27

3 The housing industry 31

3 1 The North American housing market 31

3 1 1 Canada 34

3 1 2 Mexico 34

3 1 3 USA 35

3 2 The European housing market 36

3 2 1 France 40

3 2 2 Germany 40

3 2 3 Italy 40

3 2 4 The Netherlands 40

3 2 5 Spain 41

3 2 6 Sweden 41

3 2 7 UK 41

3 3 The Asia-Pacific housing market 42

3 3 1 Australia 45

3 3 2 China 46

3 3 3 Hong Kong 46

3 3 4 India 46

3 3 5 Japan 47

3 3 6 Korea 47

3 3 7 New Zealand 48

3 3 8 Russia 48

3 3 9 Singapore 49

4 Technology overview 51

4 1 Cellular network technologies 52

4 1 1 GSM/HSPA networks 52

4 1 2 CDMA networks 53

4 1 3 LTE networks 53

4 2 Connectivity and interoperability standards 54

4 2 1 Ethernet 56

4 2 2 HomePlug 56

4 2 3 HomePNA 56

4 2 4 CEBus 57

4 2 5 LonWorks 57

4 2 6 X10 57

4 2 7 INSTEON 58

4 2 8 Universal Powerline Bus (UPB) 58

4 2 9 Zigbee 58

4 2 10 Z-Wave 59

4 2 11 Wi-Fi 61

4 2 12 Infrared 61

4 3 Industry associations 62

4 3 1 CABA 62

4 3 2 CEA 62

4 3 3 CEDIA 62

5 Channels to market and business models 63

5 1 Professional installation 65

5 1 1 Dealer/installer/system integrators 65

5 1 2 New home builders 66

5 2 Retail 66

5 2 1 Mainstream stores 66

5 2 2 Online 67

5 3 Service providers 70

5 3 1 Broadband service providers 70

5 3 2 Utility service providers 70

5 4 Business models 71

5 4 1 Selling prices 72

5 4 2 Labour costs and margins 74

6 Market forecasts 75

6 1 Market analysis 75

6 2 Cellular M2M connections and module shipments 78

6 3 Smart homes and home automation forecasts - North America 80

6 3 1 Custom and luxury home segment 80

6 3 2 Mainstream single-family home segment 82

6 3 3 MDU segment 85

6 4 Smart homes and home automation forecasts - Europe 87

6 4 1 Custom and luxury home segment 87

6 4 2 Mainstream single-family home segment 90

6 4 3 MDU segment 93

6 5 Smart homes and home automation forecasts - Asia-Pacific 96

6 5 1 Luxury home segment 98

6 5 2 Mainstream home segment 99