Home Automation and Security Technologies, Products, and Markets

Published - May 2009| Analyst - Andrew McWilliams| Code - IAS031A
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Report Highlights

  • The U.S. market for home automation and security technologies and products was worth $2.3 billion in 2008 and an estimated $2.5 billion in 2009. This should reach $8.1 billion in 2014, for a compound annual growth rate (CAGR) of 26.5%.
  • Entertainment and security technologies have the largest share of the U.S. market, generating $1.3 billion in 2008. This segment is expected to remain steady in 2009 but is expected to be worth $2.6 billion in 2014, for a CAGR of 14.1%.
  • HVAC and energy management generated $998.3 million in 2008 and an estimated $1.1 billion in 2009. This is expected to grow at a CAGR of 36.6% to reach $5.5 billion in 2014.

INTRODUCTION

STUDY BACKGROUND


Home automation technology has been around for some time but has only recently begun to enter the mainstream. 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 about energy and security to increase the attractiveness of technologies that promise to enhance the owner’s quality of life, while making the most efficient use of energy (especially electricity) and providing a sense of security. Construction of new homes was booming, at least until the recent credit crisis, and many homebuyers were younger, technologically savvy people with an affinity for the latest electronic devices.
 
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 prices are dropping.
 
In fact, the cost of installation labor and the cost 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 automaton devices to integrate seamlessly and minimize the need for special wiring to connect them.
 
 
GOALS AND OBJECTIVES
 
The overall goal of this report is to identify and prioritize the business opportunities for providers of home automation technologies that will arise over the next 5 years as products utilizing these technologies increase their market penetration. 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 (2009 to 2014);
  • Estimating the market for these technologies in 2007 to 2008
  • Analyzing the technical, economic and other demand drivers for these products, and other prerequisites of success in these markets
  • Projecting the potential U.S. markets for these technologies through 2014.
INTENDED AUDIENCE
 
The report is intended especially for providers of home automation technologies and products based on these technologies. Although the report is structured around specific technologies, it is largely non-technical in nature. That is, it is concerned less with theory and jargon than with what works, how much of the latter the market is likely to purchase, and at what price. 
 
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 concerned the market for their work, including the availability of government and corporate research funding for different technologies and applications should interest them as well.
 
Government agencies, environmental and public policy interest groups should also find the report interesting, particularly its analysis of home automation technologies that conserve energy.
 
SCOPE OF REPORT
 
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 (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, etc.)
  • Wiring and networking devices
The study format includes the following major elements:
  • Executive summary
  • Definitions
  • Home automation functions
  • Enabling technologies
  • Market environment (economic conditions, consumer attitudes)
  • Current (2007 to 2008) and projected market for home automation technologies and products through 2014
  • Developers and suppliers of home automation products
  • Key patents
The main focus of the report is on the U.S. market.
 
METHODOLOGY
 
The report is based on the results of targeted interviews with producers and users of home automation technologies and products, complemented by a thorough literature review and BCC’s internal data bases. The base-year for analysis and projection is 2008 or 2007, where data for all of 2008 were not available at the time the report was written.
 
With 2007 or 2008 as a baseline, market projections were developed through 2014. 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. That way, readers can see how the market estimates were developed and, if they so desire, test the impact on the final numbers of changing assumptions such as price.
 
AUTHOR’S CREDENTIALS
 
Andrew McWilliams, the author of this report, is a partner in the Boston-based international technology and marketing consulting firm, 43rd Parallel, LLC.   He is the author of numerous other BCC Research business opportunity analyses, including Enabling Technologies for the Smart Grid (EGY065A), which analyzed the market for “smart” home appliances. His other recent reports have included The U.S. Market for Clean Technologies (ENV011A), U.S. Indoor Air Quality Market and Trends (ENV003B), and The U.S. Market for "Green" Building Materials, (ENV007A).
 
 
 
BCC ONLINE SERVICES
 
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DISCLAIMER
 
The information developed in this report is intended to be as reliable as possible at the time of publication and of a professional nature. This information does not constitute managerial, legal, or accounting advice; nor should it serve as a corporate policy guide, laboratory manual, or an endorsement of any product, as much of the information is speculative in nature. The author assumes no responsibility for any loss or damage that might result from reliance on the reported information or its use.

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