The boundaries between the smart home market and security market at large are narrowing. Amidst a wave of expansion, suddenly everything is becoming digital. Home automation has been around for close to 30 years but hasn’t really hit it big because integration hasn’t been that simple. Now that the Internet of Things has stepped into the market, home automation is really taking off. As technology in the smart home market advances, the gap between the residential and professional security markets is growing smaller.
Additional revenue for security industry
There will continue to be more opportunity for interoperability, and home automation will continue to grow and eventually become a norm. Growth in the residential security market and its position as the channel for smart home solutions, have attracted numerous new entrants. Telecoms, cable operators, and CE (consumer electronics) manufacturers are joining traditional security players as they compete to fulfill consumer demand for safety and security.
Connected products also provide a layer of competition as consumers must decide whether having category devices such as doorbell video cameras, networked cameras and other products suffice for their security. Smart home services can provide additional revenue streams for the security industry. In Parks Associates’ 2017 survey of U.S. security dealers, 58% report that smart home service capabilities enable extra monthly revenue. Almost half of dealers also note they have to offer smart home devices and services in order to keep up with their competition.
Residential security solutions
Growth is going to be slow and steady. Everyone needs to be realistic about that"
The trend has no doubt accelerated in the last couple of years. New collaborations are being made between audio-video (AV) suppliers and security solution providers. The clientele of high-end AV products is becoming increasingly concerned with home security and property protection.
So, in recent months, the requirement for residential security solutions has been increasing as technical solutions can go hand in hand with AV installers’ capabilities and client base. “One of the big mistakes many make is that they assume – based on some of the hype and big market investments – that the smart home market is set to explode,” says Michael Philpott, Senior Practice Leader, Consumer Services at Ovum. "This is not the case – growth is going to be slow and steady. Everyone needs to be realistic about that, rather than expecting some rapid ramp up simply because some big names have entered the market.”
Pressure to upgrade security standards
Surprisingly for what has historically been something of a grudge purchase, in the context of home automation, security is seen as a solution some consumers are looking for. Another security aspect of home automation is cyber security, in particular how it applies to various IoT devices in the home. Now as connected devices gather personal information from realms long considered private and protected – the bedroom, the kitchen counter, the nursery – the risks are higher than ever.
All of the data that various devices and sites have collected can be combined, shifted and then exploited by marketers or even stolen by hackers. Both manufacturers of smart home products and the companies that install them are feeling pressure to upgrade security standards. They are moving to set policies that will regulate who has access to data and how it is used.
Ease of installation
Advances in the home market are increasing customers’ expectations as well as adoption of newer technologies
A recent revelation that some “smart TVs” might be listening to conversations and transmitting them to "third parties" caused an uproar. These sets have voice activated features that enable users to change channel, turn on a DVD or browse the internet by speaking to the screen or remote. The fine print in privacy policies contains warnings that general conversations are also being heard, and one company even told owners to turn off this function if they were concerned.
Another impact of smart homes on the security marketplace is to raise expectations about the capabilities of commercial systems. Products made today for residential applications are very high quality, easy to install (do-it-yourself, or DIY), and have very rich feature sets. End users expect their commercial solutions to have a similar ease of use and ease of installation.
Geofencing in commercial applications
The quality of video that people are seeing at home is motivating some legacy commercial customers to finally move to IP video from lower resolution analogue cameras. A higher percentage of commercial customers use mobile applications to view integrated video and access control data. People’s experience with smart thermostats has them asking for geofencing in some commercial applications. In short, advances in the home market are increasing customers’ expectations as well as adoption of newer technologies.
Read part two of our smart home mini series here.