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Smart Home

Resideo Makes Strategic Acquisition of Snap One for $1.4 Billion

Resideo made a huge acquisition of Snap One for $1.4 Billion this week following the purchase of First Alert on April 1, 2022 and several other acquisitions recently.  Resideo’s acquisition of Snap One highlights the enormous value of distribution and hardware manufacturing to provide vertically integrated solutions across business portfolios with a focus on service, support, integration, and recurring SERVICE revenues across different ecosystems including Pro security, AV, energy, and home automation.

What does this strategic purchase do for Resideo’s position?

  • Expands the Opportunity for Services Around Security Systems

  • Brings Whole Home Control, Safety, Security, and Energy for the Consumer

  • Provides Integration of Energy Devices and Systems

  • Fire Safety is a Big Business

  • Simplifies and Unifies the Experience

  1. Expands the Opportunity for Services Around Security Systems and Support

The acquisition of Snap One brings together professional integrators and enables further distribution platform of smart home and security solutions. Currently 31% of all US households have a security system, 11% have a security device – either a video doorbell or networked camera. The attachment of devices during and after system installation represents an opportunity to upsell customers.

All system owners most commonly add video devices to their security system after the initial purchase. Consumers want video, which opens a great opportunity to increase RMR with a video storage subscription. Interestingly, thermostats are among the least popular devices taken as part of the initial system purchase but are among the top three devices added to the system later.

Pro-installed system owners take more devices with their initial system purchase than owners of self-installed systems. Pro-installed owners are more likely to take nearly every device as part of their initial package than self-installed system owners. The sole exception is a smart speaker/display. Ring, for instance, offers Amazon Echo Dot and Amazon Echo Show devices as add-on accessories to the Ring Alarm DIY security system. Those who had their system professionally installed often live in larger homes than those with a DIY system; they may mean additional components are designed into the system at purchase.

In addition, the recent launch of Snap One Control4 Connect and Assist programs offers integrators recurring revenue opportunities through subscription-based models. Control4 Connect is required for new U.S. systems starting April 2 and provides features and smart living functionalities optional remote support services for a subscription fee, enhancing customer experiences and providing ongoing software updates.

  1. Brings Whole Home Control, Safety, Security, and Energy for the Consumer

A/V solutions offered by SnapOne, including the Control4 platform, bridge a gap between entertainment systems and current smart home solutions, which typically focus strongly on security, convenience, energy management, and safety.

Parks Associates' research reveals 46% of pay-TV subscribers find emerging home control and interactive features, provided through their TV service, appealing or very appealing. Consumers will use the TV in new ways in the future - and smart home technology integration will expand with the TV market.  Smart TVs are the primary device that households choose to consume video, so they are in a prime position to function as a key interface for all systems in the home, from entertainment to security to energy management.

This acquisition follows several other industry moves to bridge the smart home-entertainment gap. Streaming experience leader Roku now offers a security system and suite of smart home products, and Samsung now offers control of SmartThings products in the home using a personalized home layout map view on the TV.  The home ecosystems continue to overlap, creating new opportunities to expand control and enhance the user experience. Consumers expect and want more interconnected and technologically advanced home entertainment systems.

  1. Fire Safety is a Big Business

The acquisition of Snap One follows Resideo’s previous acquisition of First Alert in 2022 for $593 million and demonstrates Resideo’s focus on portfolio expansion. Safety features complement the premise security/intrusion detection that sits at the core of the security value proposition and is particularly important for seniors and their family caregivers. Also, at the time, Resideo CEO Jay Geldmacher noted First Alert’s “highly strategic position on the ceiling.” Resideo may be looking to pack future smart safety devices with additional sensors, and perhaps even cameras. A birds-eye view of the home interior can provide different kind of value for consumers and home service providers.

Parks Associates' newly released Smart Smoke and CO Detectors: Market Assessment 2024 reveals smart smoke/CO detectors generated $771 million in revenue in the US in 2023, with growth projected to reach $976 million in the US by 2027.

Like other smart home products, smart smoke/CO detectors experienced a new level of growth during the COVID-19 pandemic, when home renovations were on the rise and personal care and safety were top of mind. While some of these drivers have subsided, moving and renovations remain prime factors to prompt these product purchases. Winning strategies will target consumers at these times, with messaging highlighting the benefits along with the ease of installation when improving your home or moving into a new one.

  1. Provides Integration of Energy Devices and Systems

Saving energy is the #1 reason smart home device owners coordinate their devices into “routines.” 40% of smart home device households have established a routine – integration and coordination between devices, and saving energy is the #1 reason they do so. Simple routines that coordinate lights, HVAC controls, and appliances are appealing to smart home device owners.

For instance, almost half find appealing the idea that their HVAC systems will automatically adjust when they leave home to save energy. Smart home and security platforms can work more closely with smart thermostat, smart light/plug, and smart appliance manufacturers to together increase the value of smart solutions by automating practical benefits for the end user.

52% of US internet households indicate automating savings and remotely controlling lights, thermostats, and appliances to save energy are valuable or highly valuable benefits for smart home devices.

Platforms like Control4 are designed with these integrations in mind, and Resideo brings the energy devices from its portfolio of thermostats, lighting controls, and HVAC-related products like filters and humidifiers. For instance, users can engage in an away scene with one button that turns off all the lights, the television and other connected systems, and arms the security system.

  1. Simplifies and Unifies the Experience

Unifying the experience is important to consumers. Consumers often buy smart home devices for specific purposes at different times, and less frequently in a systems-based approach. Control of those devices is then fragmented.

About one-fifth are using 3 or more platforms to control their smart home devices. In prior Parks Associates research, nearly all (90%) smart home device owners say they want a single unified app to control their devices. With the Matter standard, consumers will have a choice of control applications that can communicate with all Matter-enabled devices.

This means that Alexa can control Google/Nest devices or Siri can control Amazon/Ring/Blink devices. This reduces some of the interoperability challenges that cause frustration among smart home users, but also sets up a new competition about which brands will be the master home control app/assistants.

The future is big for this mega player. From Resideo's announcement, "Upon closing, Snap One will integrate into Resideo's ADI Global Distribution business." With this acquisition, we expect to see Resideo lean even more strongly into professional channels and services, with an eye on whole-home automation bridging its life safety, security, and energy core assets with Snap One’s strength in entertainment and high-end controls.

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