This week was marked by a flurry of acquisition activity in the smart home segment that could have significant long-term repercussions. First, Spectrum Brands has agreed to sell their home and hardware improvement business for $4.3BN to ASSA ABLOY, a Swiss access solutions company. By selling, Spectrum Brands will focus on their remaining businesses: Home and Personal Care -- which includes Black & Decker, George Foreman, Global Pet Care, and Home & Garden.
ASSA ABLOY, a market leader in access and controls, can leverage complementary products of Spectrum Brands to strengthen its North American position. We all know that in a COVID-19 environment, there has been a significant demand for home improvement products, especially with Americans working from home during the pandemic. The acquisition provides ASSA ABLOY with Spectrum key brands, including Kwikset, Baldwin, Weiser, Pfister, and National Hardware.
Parks Associates recent research shows strong growth in the connected lock product segment:
- Between 13-15M exterior door locks are sold to US broadband households each year. Approximately 15% of those are smart locks.
- In 2020, about 8% of US broadband households report had at least one smart home lock, totaling nearly 8M households.
The integration of video cameras with smart door locks will become more common future-forward. Enabling home services will drive the adoption of smart door locks with video camera integration by expanding their value to consumers. The combination device of a smart door lock and video camera increases convenience for consumers, who no longer need to buy two devices to achieve the same features. In the future, companies will explore adding a camera with video analytics to smart door locks to strengthen options for biometric security by using facial recognition or iris scanning to lock or unlock doors.
In addition to this considerable announcement, another significant smart home-related transaction was announced. On September 8, Private Equity Funds, managed by Blackstone, announced that it had agreed to purchase The Chamberlain Group from The Duchossois Group for a reported $5 billion. This partnership is set to scale the company’s 67-year-old garage door business, allowing for scale and innovation.
Amazon was first to introduce in-home delivery services in October 2017, when it announced the Key by Amazon service, and Chamberlain is one of its first partners through myQ Smart Garage. At launch, the service was designed to make in-home deliveries using the front door but then expanded to garages and has rolled out services across the US. Parks Associates research shows that 12% of US broadband households report using a package delivery service that delivers packages inside their home or garage when they are not home. With 37% of access device owners showing high interest in the service, the total addressable market size for in-home delivery services in the US is estimated at $536 million.
Parks Associates forecasts the smart garage door category will grow from $701M in sales to $777M by 2025 and will continue to see integration with other core smart home applications and integration with the vehicle. According to Parks Associates' latest consumer surveys, the current adoption of smart garage doors is at 9%.
These announcements show the significant activities taking place across the major smart home category of access and controls. As we move into Q4 2020 and 2022, we expect to see continuous acquisitions and investments in these areas.