Home Automation and Security Technologies, Products, and Markets

  • August 2011
  • -
  • BCC Research

Summary

Table of Contents

REPORT HIGHLIGHTS

* The U.S. market for home automation systems and devices was worth approximately $3.2 billion in 2010. It is expected to grow to almost $3.4 billion in 2011. In the longer term (i.e., 2011 to 2016), the forecast is for strong renewed growth in the home automation market, which is expected to exceed $5.5 billion in 2016, a CAGR of 10.5% between 2011 and 2016.
* Lighting, home entertainment, and security systems accounted for nearly 58% of the U.S. home automation market in 2010. It is estimated to be around $2.1 billion in the year and further to reach $3.8 billion by 2016 at a CAGR of 12.2 %.
* Heating, ventilation, and air conditioning (HVAC) and energy management made up for the remaining 42% of the U.S. market. It is expected to reach $1.7 billion by 2016 at a CAGR of 7.4% between 2011 and 2016.

INTRODUCTION

STUDY BACKGROUND

Home automation technology has been around for many years, but it has only recently begun to enter the mainstream. The reasons for home automation’s growing popularity include developments on the demand side as well as the supply side.

On the demand side, rising incomes and standards of living have combined with increased concerns regarding energy and security to increase the attractiveness of technologies that promise to enhance the owner’s quality of life, while also making the most efficient use of energy (especially electricity) and providing a sense of security. The drop in construction of new homes as a result of the financial crisis that started in 2008 has dampened the demand for home automation systems, but in the longer term, many would-be homebuyers are younger, technologically savvy people with an affinity for the latest electronic devices, thus creating a favorable market environment for home automation systems.

On the supply side, the declining cost and complexity of new home automation products is helping to attract new buyers. Until a few years ago, the cost of quality home automation components was prohibitive for all but the enthusiast market, but now prices are dropping.

In fact, the cost of installation labor and the expense of educating electricians in this field are becoming the most inhibiting factors. Fortunately, other developments are helping to reduce the difficulty and cost of installation. These developments include the growing use of standards-based wireless technologies that allow home automation devices to integrate seamlessly and minimize the need for special wiring to connect them.

GOALS AND OBJECTIVES

This report is an updated version of a BCC report that was originally published in 2009. The report’s overall goal is to provide readers with an updated understanding of the business opportunities for providers of home automation technologies over the next 5 years, taking into account recent economic and technical developments. In support of this goal, specific objectives of the report include:

* Identifying the home automation technologies with the greatest commercial potential over the next 5 years (2011 to 2016)
* Estimating the market for these technologies in 2010
* Analyzing the technical, economic, and other demand drivers for these products, as well as other prerequisites of success in these markets
* Projecting the potential U.S. markets for these technologies through 2016

INTENDED AUDIENCE

The report is intended for providers of home automation technologies and products based on these technologies. Although it is structured around specific technologies, it is largely non-technical in nature, meaning it is concerned less with theory and jargon than with technologies that work, the amount the market is likely to purchase, and the prices consumers are willing to pay.

As such, the report’s main audience is executive management, marketing, and financial analysts. It is not written specifically for scientists and technologists, although its findings concern the markets for their work, including the availability of government and corporate research funding for different technologies. Applications should interest them as well.

Government agencies, as well as environmental and public policy interest groups, should also find the report interesting, particularly the sections that include analyses of home automation technologies that conserve energy.

SCOPE AND FORMAT

The study covers the major segments of the home automation market, including:

* Lighting controls
* Heating, ventilation, and air conditioning (HVAC) controls
* Energy management controls
* Entertainment controls
* Security controls
* Integrated (i.e., multi-function) controls

The study addresses the major enabling technologies for the various types of home automation products, such as:

* Controllers
* User interface devices
* Sensors
* Actuators and output devices (e.g., dimmers, automated window coverings, dampers)
* Wiring and networking devices

The study format includes the following major elements:

* Executive summary
* Definitions
* Home automation functions
* Enabling technologies
* Market environment (e.g., economic conditions, consumer attitudes)
* Current (2010) and projected markets for home automation technologies and products through 2016
* Developers and suppliers of home automation products
* Key patents

The report’s main focus is placed on the U.S. market.

METHODOLOGY

This report is based on the results of targeted interviews with producers and users of home automation technologies and products. It is complemented by a thorough literature review as well as BCC’s internal databases. The base year for analysis and projection is 2010.

With 2010 as a baseline, market projections were developed through 2016. These projections are based on a combination of a consensus among the primary contacts combined with BCC’s understanding of the key market drivers and their impact from a historical and analytical perspective.

The methodologies and assumptions used to develop the market estimates and projections are described in detail in the chapters on home automation markets. This allows readers to see how the market estimates were developed, and if they so desire, to test the impact on the final numbers of changing assumptions (e.g., price).

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