The increased popularity of devices like smartphones and affordability are helping “connected” and “smart home” security devices replace traditional residential security, suggests a report from IHS.
The market for traditional residential security equipment was valued at US$2.3 billion in 2015. Despite its size, growth remains flat at best.
The term traditional security refers to systems installed by a professional which have local management capabilities alone. “Connected” security systems are those that can be remotely managed but with devices that do not speak to each other. “Smart home” security includes devices that make decisions based on some form of input. For example, if a smart thermostat detects no one is at home, it will switch off the lights, lock the front door, etc.
“The popularity of the latter two types of equipment [‘connected’ and ‘smart home’ security devices] has spiked as a result of a variety of factors, increasing smartphone usage for example, the fact that customers now possess such a powerful device at all times when away from home has flung open the doors of possibilities for residential security providers,” noted Jim Dearing, analyst at IHS. “Manufacturers have introduced the capability to arm/disarm systems, open gates or live stream home surveillance equipment through smartphone applications; end users are now able to interact with the equipment with greater ease and more often and therefore see more value in connected/smart devices. Another important factor has been wireless equipment affordability finally reaching a point where the additional cost of buying wireless products is outweighed by the installation cost of a wired system.”
Several multi-system operators have been quick to exploit this demand and the availability of affordable equipment, allowing them to establish strong presence in the US residential security market. At present over 85 percent of global connected/smart equipment is in the Americas. In other parts of the world, especially in Europe, the energy management aspect of smart home devices have seen more popularity than security, prompting the entry of utility companies into the segment.
However, it is not just the multi-system operators and utility companies that are competing for a share of the smart home market, but several new entrants too, the report noted. Apart from the traditional security providers, specialist home automation providers, software and platform providers, all bring their own value proposition to the table with the aim to spur market adoption.