According to a new report from IMS Research, part of IHS, Inc., the penetration rate for intrusion alarm products in the U.S. is expected to increase by five to eight percent over the next three years. Despite the recent entry of large cable and telecommunication providers into the industry, the research firm said that the market is embracing these new competitors as they are partnering with established security suppliers to offer complete home security product offerings and increasing market awareness.
According to Adi Pavlovic, a security and fire analyst for IHS, "the emergence of new market entrants, such as telecommunications companies, is expected to increase end-user awareness of home management systems, which combine traditional home security products with innovative home automation technology."
While home automation features motivate the sales of integrated home management systems, basic intrusion systems lead in market sales.
Telecommunication companies such as AT&T and Time Warner have recently launched their own home security offerings and join a growing list of companies entering the market including Comcast, Cox Communications, Verizon, and Lowe’s. Leveraging their existing client base, these companies are offering home management systems in addition to current products, like cable, telephone and Internet, which increase their average revenue per user (ARPU). While many of these new entrants are using professional monitoring services, others have chosen to launch their own stations.
Companies like Lowe’s and Verizon are offering products designed for self-monitoring, which do not require monthly monitoring fees. Lowe’s partnered with Verizon to sell Lowe’s Iris product line in conjunction with Verizon’s home security solutions in Verizon stores across the U.S. These systems charge a lower monthly fee than traditional monitoring services and don’t require a contract.
While self-monitoring products make up a small portion of the market, the potential for these products remains high due to the ever-increasing use of smartphones and other handheld electronics. These new entrants are not only offering complete security products, but they are also partnering with manufacturers to produce specific products, like SMC and Technicolor. It may be too soon to predict how these new services will influence the market for traditional intruder alarms, but it is expected that the market will become more competitive with future mergers and acquisitions.