Parks Points

2014: Smart Home and Security - Part Two

by Tricia Parks | Jan. 2, 2015

The Status of Smart Home Systems with Professional Security

In 2014, sales of security system controllers, either as replacements or as part of an initial security system sale, will hit about 4M units (Figure 3). This represents growth from 2013, reflecting both better numbers for new housing starts and a society that is again moving more often than during the recession. It also derives from non-moving households acquiring a security system or upgrading their current system due to its age, a switch in providers, or a desire to upgrade to a system with smart home features. The growth rate of smart home controller sales is even faster. Parks Associates forecasts that the number of smart home controllers to be sold with or for security systems in 2014 will equal 22% of all new security system controllers sold during the year. Not every household that acquires a new security controller will also acquire a smart home controller. Nor does a security system controller sell every time a smart home controller is added to a system. Some households can add a smart home controller and devices without changing out their security controller. Other households want professional security and do not want smart home services.

However, installations or upgrades for smart home will increase as noted in Parks Associates forecast. This will occur even as the growth in sales of security systems flattens. In 2017, the number of smart home controllers that will be added to or sold with security systems will increase to just under 40%. The ancillary value offered by smart home systems will be increasingly important to overall sales success.

Broadband Households with Security Systems & Smart Home

In 2014, 13% of U.S. broadband households report owning at least one smart home device (~10% of all U.S. households). Of that 13%, about 60% have their device or devices under the control of a centralized controller. Five percent report owning security systems with added smart home controller and devices. Further, while about 80% of all broadband households with any working security system report having professional monitoring, 96% of households with security and smart home report having professional monitoring.

Customers that acquire security with smart home features are valuable. They do, undoubtedly, represent early adopter or affluent households which can afford the features they want. But as competitive pressure on monitoring prices increases over the next 2-3 years, having smart house offerings can help offset the potential need to reduce monitoring prices in order to expand the marketplace.

Bottom Line: these households have add-on potential for years to come. Not only are owners of security systems with smart home features nearly all professional monitoring customers, they are upscale and, even more importantly, they are young households.

  • 56% of these households have household incomes of $75,000 or more compared to only 34% of households without security and smart home
  • Nearly all are homeowners
  • 62% of security owners with smart home features are between 25-44 years old, compared to 39% of households without this system combination
  • Finally, they are 88% more likely to have minors at home.


What devices have current adopters of smart home features with security systems acquired?

No more than 6% of all broadband households report owning any specific type of device except networked cameras. Networked cameras have been available for years; they have lower prices than in the past and are understood by more consumers than some other smart devices. More than one-half of the adopters of smart home features for their security systems acquired at least one camera. The average hovers at about 1.5 per household. Beyond cameras, popular smart home devices are lighting controllers and smart thermostats. Five percent of households having security systems report ownership of some smart home features. These households currently represent about 40% of today’s smart home device owning households. That edge and first position must be maintained by skilled sales practices and expanded device offerings.

Security providers hold the catbird seat today. To keep that position requires constant incremental improvement and expansion. The mass market at large does not want monthly fees. Over time, this limits the size of the market for professionally monitored security. However, those who have and intend to acquire smart home system and features over the next year are open to monthly fees. Now is the right time to reach those prospects. Today’s owners of smart home devices are most likely to have acquired the devices as part of a home security system. That may hold for the next few years, but it will change unless security providers market their value and service steadily and well.

What do smart home device intenders want?

Intenders for the next 1-2 years follow the same pattern as past buyers for desired smart home devices. No single device dominates (Figure 6). No single brand of device dominates. Instead, a cluster of benefits are desirable. Meeting that goal requires adding multiple devices. That translates to more complex installations using interoperable products. This provides a continuing advantage to security installers. Consumers repeatedly report that ‘easy’ is an important consideration for deciding whether to acquire smart home devices and systems—and which brands to acquire. This reality serves security dealer strengths and keeps the door open for monthly fees, even for some intenders who do not initially want those fees. The importance of interoperability also increases for consumers seeking additional smart home devices or assessing whether to purchase more than one smart home device.

Security dealers must seize these current advantages because the role of DIY smart home controllers will accelerate as smart home systems become more familiar to consumers. Today, familiarity in the overall household population is at only about 10%. That will change; how quickly depends upon offerings and industry marketing. More smart home device intenders report that they will purchase their smart home capabilities as part of a home control system rather than as part of a security system. This differs from current patterns. However, ease and simplicity of install and usage are important considerations. In addition, exactly because the majority of householders report they seek to avoid monthly fees, security dealers must stress not only their device and system benefits, but also the ease and hassle-free experience offered by professionals. With these competitive advantages, security dealers will convince a segment of consumers that a fee-based smart home system with professional installation is the right way to add these valuable features to their home.

Now is the time for security providers to push. The inherent advantage of professional installation and interoperability will decline over the next years. But today, that advantage belongs to security.




Tricia Parks

Tricia Parks

Founder and CEO

Tricia Parks is the founder, chairman, and CEO of Parks Associates, a market analyst and research company dedicated to providing meaningful information and counsel to companies offering technology-based products aimed at improving people's lives. She presents worldwide on consumer trends, market requirements, and industry structure, with an eye to meshing visionary and progressive ideas to consumer needs and wants.

Parks Associates hosts CONNECTIONS™, an international conference and showcase for the digital home hosted in the U.S., and CONNECTIONS™ Europe, hosted in Europe and focusing on market opportunities for digital products and services in the many nations of Europe. Tricia Parks also developed the Relevancy Theory, a forecasting model for sales across a broad range of digital electronic products and services.

Tricia has served on a variety of industry boards including CEA's Home Networking and Information Technology division, the National Research Council's Committee for a Partnership to Assess Technology for Housing (PATH), the AMD Board of Global Consumer Advocacy, and CABA. Tricia Parks has a BA from Sweet Briar College and graduate studies from the University of Texas.

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