The Next Service Provider Race: Monitoring, Access & Controls

Grab an early lead in this market by determining consumer interest and price points for new IP-based features and applications.

This consumer study measures and analyzes interest in IP home services and features:
• Home monitoring and access control services
• Energy management and monitoring
• Digital health services
• Home controls

Sign up today for this project:
• Concept testing for a variety of IP services
• Inhibitors and catalysts for different combinations of services
• Three-year forecasts for subscriptions and revenues
• Current consumer activities pertinent to IP services
• Interest in core and related service features, plus price points for
additional fees

For more information, visit:
http://www.parksassociates.com/ipservices/

Parks Associates CEO to moderate two sessions at Broadband World Forum 2010

Tricia Parks, CEO, Parks Associates is participating on the panel, "Managing Household Energy" on Tuesday, October 26th from 3:30 PM at the Broadband World Forum in France. Tricia Parks is also hosting a breakfast briefing, "Getting Consumers to Care about Home Controls" on Wednesday, October 27 at 8:00 AM.

Broadband World Forum Europe focuses on convergence, interoperability, and the transformation of carrier networks and is hosted in Paris, France Oct 26-28, 2010. Tricia Parks’ energy presentation will focus on actions consumers in the U.S. are taking to manage their energy usage as well as on their attitudes towards emerging services to help that effort and the entities offering those services. During the breakfast briefing, she will be highlighting new applications driving home controls systems.

Verizon invests in 4Home

We have seen quite a ramping up of both planning and actual deployment of service provider-centric home control, monitoring, energy management, security, and health applications. Perhaps one of the more notable offerings is Comcast's XFINITY™ Home Security offering, featuring remote montoring and optional features for remote energy and lighting management.

Now comes word that Verizon Investments Inc. has participated in 4Home's Series-B financing round that closed in the first quarter of 2010. The investment, which was arranged through Verizon Communications Inc.'s Verizon Ventures group, assists 4Home to facilitate consumer-focused initiatives, including those underway with Verizon. 4Home has created a software platform for the deployment of home management services, including home monitoring, energy management, and home control.

My colleague Brett Sappington has been tracking the activity in the telcom/broadband space and home controls - including a global overview of what's happening - and we'll be discussing this in greater detail in coming reports and consumer studies.

Energy management, entertainment systems control, and remote home monitoring to drive adoption of home controls

Three applications will drive adoption of control systems over the next five years: energy management, entertainment systems and content control, and remote home self-monitoring. Consumers see the value in these areas, which, once established, can serve as the base for expanded control systems in the home.

Parks Associates new report Home Systems: Home Controls – Analysis and Forecasts finds low consumer awareness and a shortage of affordable installation services currently hinder widespread adoption. The entry of well-known players, including ADT, Best Buy, Radio Shack, and Schlage, will help grow this market, but players should focus their value proposition on specific, easily understood applications in order to build consumer awareness and lay the foundation for future expansion.

For example, as entertainment controls for home theater and audio systems become more affordable, penetration will expand from 5% of U.S. households to 17% by 2014. These systems can then be expanded to integrate lighting, window treatments, and security controls, a strategy that will help push penetration of control systems overall to almost 20% of households by 2014.

Security Monitoring Fees for U.S. households have increased 15% since 2007

Home security companies have avoided the worst of the recession due to a stable core of consumers who have kept their monitoring services despite rising fees.

In a recent report Home Systems: Home Security - Analysis and Forecasts, Parks Associates finds the average monitoring fee for a U.S. household increased from $28.60 to $32 between 2008 and 2010. This rise has kept revenues from home security relatively stable, despite declines in overall sales due to weak home sales and catastrophic drops in new starts. This strategy relies on a group of existing customers who will retain their service despite rising monthly costs, which has been successful but has its limits.

IP technologies open the door on all industries to new, nontraditional competitors. Moving forward, the security industry must be careful not to raise monthly fees too quickly, or it risks accelerating entry of these new players. Continued aggressive fee increases may create short-term benefits but risk long-term turbulence. Instead, security companies need to reposition to win new customers, rather than expecting their existing customers to carry the burden.

Integrators and Home Networking

Each year, Parks Associates surveys installing dealers throughout the U.S. through its ongoing Channel and Consumer Monitor project, and as we launch our 2010 survey this week, we are taking a look at some of the more prominent trends over the past few years and how they are impacting the dealer market and related industries.

One significant trend has been the rising awareness of home networking, specifically no-new-wires networking technologies as valuable solutions for dealers' businesses. For example, based on our last survey, more than one-half of integrators are familiar with Wi-Fi (based on the 802.11n standard), and 19% are familiar with at least one type of powerline connectivity media (e.g., HomePlug, Powerline HD, HD-PLC).

Want to know more? Click here to subscribe to the Home Systems Monthly Newsletter from Parks Associates.

50% of U.S. households are interested in home energy monitoring

Home monitoring and controls companies will need to take alternate, more indirect routes to reach mass-market status, according to international research firm Parks Associates.

Almost 50% of U.S. households are very interested in an energy-monitoring device, with nearly 80% willing to pay $100 provided it saves 10-30% on their electricity bill. Energy applications are popular now because of the need for cost savings, but in the end, all home systems will need to be interconnected. By embedding their technologies into energy-related appliances and systems, controls and monitoring companies can get a foothold in the home and start to build traction on a mass scale with consumers.

Controls and monitoring companies can form strategic partnerships with system manufacturers, service providers, and utilities to build these inroads. Many utilities have smart grid programs, which have partnership opportunities, but the popularity of energy solutions has attracted new, nontraditional players. For example, Intel recently announced a sensor that monitors power usage throughout a home and shows the homeowner the amount of power used by different appliances and systems.

Home controls and the Trojan Horse

Throughout its 24 years of history, Parks Associates has been grappling with the question of when and how home control systems will become mainstream.

Home systems analyst Bill Ablondi, in Parks Associates’ most recent report, Home Systems: Home Controls-- Analysis and Forecasts flips the question. Ablondi and colleague Farhan Abid say that the current value propositions for consumers to purchase control systems are not sufficient to appeal to mass markets. Either the systems are too expensive for a cost conscious home buyer, are too complicated to install, or though appealing, don’t sufficiently wow a mainstream home owner into a purchase decision. The path to adoption, therefore, is for control systems companies to get their technology installed in the systems that we are already buying for our homes. If control companies will partner with systems companies such as Trane, Honeywell, GE, Sony, Whirlpool, Logitech and others in order to incorporate their technologies into TVs, refrigerators, remote controls, thermostats and other established systems, then the consumer can simply enable the control application that, like a welcomed Trojan Horse, has already entered the home.

If a consumer could download a smartphone app or TV widget to enable the control capabilities built into home systems, they would suddenly discover the value proposition first-hand and potentially provide control systems vendors with the holy grail of revenue models – a monthly subscription fee.

U.S. Electronic Systems Contractors optimistic about business prospects in 2010

On average, U.S. home systems integrators, who have had revenues fall for the past two years, expect sales to pick up by more than 9% in 2010 over 2009, according to Home Systems: Channel and Consumer Monitor.

This report includes results of a fourth-quarter 2009 survey of integrators installing home controls, entertainment systems, and energy management solutions, conducted as a joint effort from international research firm Parks Associates and the Custom Electronic Design & Installation Association (CEDIA).

Home Systems: Channel and Consumer Monitor reports that integrators continue to generate two-thirds of their revenue from A/V systems but many integrators plan to diversity in 2010 by adding lighting controls and solar panels to their 2010 offerings. Approximately 40% of integrators plan to begin installing photovoltaic solar panels, and another 38% are seeking more information on this product category to determine its viability. In addition, the trend toward more retrofit projects, which accounted for 63% of 2009 revenues, will continue.

Visit www.parksassociates.com for more information on Home Systems: Channel and Consumer Monitor.

CONNECTIONS™ to focus on business strategies, new connectivity solutions in Digital Living Markets

Parks Associates announced the Call For Papers for the upcoming CONNECTIONS™: The Digital Living Conference and Showcase. The 2010 conference will take place June 8-10 at the Santa Clara Convention Center.

The main topic areas for the event are Entertainment Platforms & Value-Added Services, New Media and Digital Content, Consumer Electronics, and Home Systems & Controls.

Emerging technologies continue to change the digital living landscape. Mobile applications are increasing the role of service providers, who are adding home controls, energy management, and entertainment offerings to their platforms. Online video is radically transforming the roles of the TV and the game console, while Blu-ray and video kiosks are reshaping the distribution channel for physical media. At this point, we don’t know which business models will ultimately prevail.

CONNECTIONS™ will address the opportunities and challenges in connected CE, 3D TV, smart grid and energy management solutions, consumer and technical support, smartphones and mobile services, social media, and content management.

For fourteen years, CONNECTIONS™ has been the premier event for research and analysis of connected home technologies and digital living solutions. The executive conference features consumer research and presentations from international research firm Parks Associates and a comprehensive agenda with over 80 speakers. Past conferences featured keynotes from AT&T, Verizon, Sony, Intel, and Microsoft.

Submission Deadline is January 30, 2010.

Over Eight Million Smart Meters Deployed in U.S., with Millions More to Come

Report profiles key players in Residential Energy Management, analyzes new opportunities for companies in the Smart Grid value chain--

With over eight million smart meters already deployed in the U.S., the market for residential energy management (REM) has taken the first significant steps in deploying Smart Grid technologies and advanced meter infrastructure (AMI) on a broad scale.

The recently completed report, Residential Energy Management: Company, Alliance & Technology Profiles, says these deployments will open up significant opportunities for companies in the REM value chain. Public, private, and consumer factors are all driving this growth, and the Federal stimulus bill, with the support of the Obama Administration, allocates $11 billion for smart grid initiatives through 2010.

Residential Energy Management: Company, Alliance & Technology Profiles provides coverage of more than 60 companies and ten alliances, including Home Area Network (HAN) solutions and component suppliers; metering solutions manufacturers; Smart Grid enablers; and technology enablers.

This report is the first deliverable in Parks Associates’ comprehensive industry and consumer research service called Residential Energy Management: Opportunities for Digital Systems and Services.

For the full press release, visit click here.

Verizon getting into home controls?

According to CNET, Verizon Communications is exploring ways to use its Fios broadband service to give consumers ways to remotely control their thermostat and view their energy usage.

Company engineers are now designing applications, including energy management, to work with the routers that come with its Fios service.

The first application Verizon expects to roll out will be videoconferencing by the end of the year, according to company spokesman Jim Smith, who said home security and energy management are also being considered.

Google Enters Smart Grid Market

This week, Google demonstrated PowerMeter, a home energy consumption prototype Web application. Using smart meter technology allows consumers to decrease energy usage by appliance.

Rather than working through utility companies, like other smart grid companies, Google is striving to make home energy data available in real time. To help gain popularity, Google is developing partnerships with hardware manufacturers, utility companies, and government entities. By building a custom application using PowerMeter or the Google gadget platform, a smart meter company could easily make their information available too.

The push towards more smart grid technology continues. According to Parks Associates research, the number of U.S. households with smart meters is projected to increase to 6 million by 2012.

To read more about this, visit Martin LaMonica's article on CNET, "Google crashes the smart-grid party."

Newmark Homes Sells 230 Units With Wayne-Dalton Controls

Company says it's an effort to differentiate itself in the tough housing market.

Oct. 13, 2008 — by Jason Knott

In an attempt to differentiate itself during this tough housing market, Newmark Homes is now offering the Wayne-Dalton Z-wave Home Controls package as a standard feature in all new builds.And it might be working. In the eight months since the adoption, the Austin, Texas-based Newmark has sold 230 homes.“I’m always looking for that one thing that will make us different and stand out," says Don Cox, VP of sales and marketing for Newmark Homes. Article Link

This article in CEPro struck a cord with us in the Home Systems Group at Parks Associates. We just finished a report that focused on the subject of wireless controls — Opportunities for Wireless & Powerline Controls. In the report we explained how our research shows that home builders are turning to technology amenities to differentiate their homes. A broad-based survey we conducted in partnership with Hanley Wood’s Digital Home revealed that 40% of single family home builders are looking for electronic products and services to differentiate their homes; another 32% are installing amenities, e.g. wiring for home theaters, multi-room audio and home offices to speed the sale/rental of homes. Clearly Newmark Homes fits this profile.

In addition, another point made in Opportunities for Wireless & Powerline Controls is that systems incorporating home controls into everyday applications such as opening the garage door and initiating a sequence of events – lights turn on, thermostat resets, etc. – help build awareness for the capabilities of control systems. Wayne Dalton’s system is an excellent example of this phenomenon at work.

Single family home builders are not alone in their inclination to seek out technology amenities to differentiate their products. We just completed a major study of the multifamily industry, Multifamily Residences: Opportunities for Digital Systems & Services, in partnership with Multifamily Executive and Developer magazines. More than half of multifamily executives are looking to technology services and products to differentiate their properties. This strategy makes perfect sense for several reasons: in a slow economy differentiators such as technology are more important than ever, Gen Y renters and buyers want technology, and, there’s more money to be made by feeding resident demand (all ages) for certain services and systems.

Opportunities for Wireless & Powerline Controls Webcast

Home controls have largely remained confined to the upper strata of new home construction for decades. However, new approaches incorporating wireless and powerline technologies, a migration of traditional suppliers to IP-based systems and, perhaps most importantly, the entry of key market movers are driving change.

Bill Ablondi, Director of Home Systems Research, Parks Associates will present new research, forecasts and analysis during a webcast on Thursday, May 22, 2008 at 1:00 p.m. Central. The Opportunities for Wireless and Powerline Controls presentation will examine the state of the market, technology alternatives and an overview of the competition.

At the upcoming CONNECTIONS Conference, Bill will also be moderating the panel, HOME SYSTEMS: From Controls to Entertainment & Security – Trends and Opportunities. Confirmed Speakers for this panel include: Doug Fikse, President, On-Q/Legrand; Kevin Meagher, CEO, Intamac Systems; Michael Peveler, VP, Corporate Development, AMX; Tony Shakib, CEO & President, Zensys; and Will West, CEO, Control4.

Home Systems: Spring 2008 Update at EHX

Parks Associates and EH Publishing will present "Home Systems: Spring 2008 Update" at EHX this week. The briefing will include a summary of their latest research, analysis, and forecasts on topics such as multi-room audio and home theater systems (including media servers), control and security systems, and state and local residential construction market trends.

If you would like to meet with Bill or Daryl at the show, please let me know. They are available to provide more insight into home controls topics and forecasts for the market.

Parks Associates recently launched a Home Systems Newsletter. We invite you to sign up for free at http://www.parksassociates.com/homesystems.

CES is over, so now what? Analyst predictions.

Huge TVs and digital photo frames. Smarter remotes and 3D games. Home controls, home networks and home monitoring. By now everyone knows the buzz from CES, but what's next?

Parks Associates analysts reveal the following consumer research data and forecasts:

• Consumers want videos & programs on demand more than anything when it comes to value-added TV features.
• Broadband video services pushing a movies-only format underperformed; movie rentals/downloads from the Internet were only $99 million in 2007.
• Consumers are buying more broadband video - 48% of broadband Internet users watch Web video on at least a monthly basis and 20% are downloading longer episodes.
• More people use iTunes to download videos longer than 10 minutes. Amazon.com's Unbox & BitTorrent services follow in second & third place.
• In 2008 and beyond, we'll see a greater emphasis placed on bringing broadband video to the television via media adapters, game consoles, and network-connected devices such as TVs, stand-alone set-tops, and DVD players. Broadband video revenues for content consumed at the television will total $1.5B by 2012.
• The connected home - More people want the ability to monitor webcams in their homes from any Internet-connected device, more so than to control a home's thermostat from an Internet-connected device or to control lights from an Internet-connected device.
• Mobile Internet will begin to see mass market adoption, and the form factors will diversify to include devices such as portable multimedia players (PMPs) and portable game consoles.
• There will be major investments in the cable MSO space. Switched digital and DOCSIS 3.0 will help to reclaim bandwidth and expand offerings.
• Place-shifting features (currently embodied through products such as Slingbox and Orb Networks) will move beyond after-market products with nearly 53M WW households using such features by 2012.
• Virtual worlds will ride the hype cycle, and we'll see a growing emphasis on these applications in corporate settings as a means to enhance collective collaboration.
• The 700 MHz auction will spur more innovation on the mobile phone handset and will reduce the influence of the mobile carriers.
• Home theater systems become the next "appliance" offered by home builders.
• Europe will be the decisive market for powerline networking.
• Tracking new payment methods (such as micro-transactions) for online consumers will be an interesting model to watch.
• The first major cracks will appear in the movie distribution widows, and video-on-demand services will be enhanced by the earlier availability of certain content.
• The in-car entertainment experience begins to reflect the living room.

For more information visit http://www.parksassociates.com/.