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Home Security Market Poised for 9% Growth in 2010
Market data shows slow steady increases through 2012. Seventy-five percent of revenue is from monitoring, not installation.
According to Parks Associates, the home security market is expected to grow slowly over the next three years.
The residential burglar alarm market is on pace to grow 9 percent in 2010 and 27 percent over the next three years, according to Parks Associates.
Home security sales have taken a hit during the recession, primarily because the real estate market tanked. Fewer new homes being constructed means fewer new customers.
When an existing home with an alarm system is sold, the alarm company has the opportunity for two new sales. First, the homebuyer is likely to keep the existing system and become a new customer. Second, the home seller is likely to hire the alarm company to install a system in the new house.
According to Tim McKinney, director of ADT’s Custom Home Services division, currently between 16 percent and 18 percent of U.S. households have monitored security systems.
Parks Associates estimates the U.S. residential intrusion market will be just more than $9 billion in 2010. Nearly 75 percent of the consumer-level spending will come from monitoring revenues ($6.7 billion); just under 20 percent will come from hardware purchases ($1.8 billion) and only 6 percent of revenues will come from installation labor ($521 million).
Other pertinent data on the residential security market, as reported by Security Sales & Integration:
Learn more in the Recurring Revenue Track at EHX Spring. | http://www.ehxweb.com
Electronic House Expo Spring 2010: The New Opportunities Show, March 25-27, 2010, Orlando, Fla.
Smart Energy | Commercial | Home Health Tech | Recurring Revenue | Digital Content | Retrofit
Home security sales have taken a hit during the recession, primarily because the real estate market tanked. Fewer new homes being constructed means fewer new customers.
When an existing home with an alarm system is sold, the alarm company has the opportunity for two new sales. First, the homebuyer is likely to keep the existing system and become a new customer. Second, the home seller is likely to hire the alarm company to install a system in the new house.
According to Tim McKinney, director of ADT’s Custom Home Services division, currently between 16 percent and 18 percent of U.S. households have monitored security systems.
Parks Associates estimates the U.S. residential intrusion market will be just more than $9 billion in 2010. Nearly 75 percent of the consumer-level spending will come from monitoring revenues ($6.7 billion); just under 20 percent will come from hardware purchases ($1.8 billion) and only 6 percent of revenues will come from installation labor ($521 million).
Other pertinent data on the residential security market, as reported by Security Sales & Integration:
- Average Installation Price: $1,520
- Average Monthly Monitoring Fee for Residences: $24
- Residential installations account for only 34 percent of total burglar alarm market, the rest of the alarm market is commercial or government
- Average residential net attrition account rate is 5.2 percent
- Only 13 percent of installations are subsidized or “low-cost” installations, which typically range from $0 to $299, in which the alarm company is installing the system for less than their own actual costs
Learn more in the Recurring Revenue Track at EHX Spring. | http://www.ehxweb.com
Electronic House Expo Spring 2010: The New Opportunities Show, March 25-27, 2010, Orlando, Fla.
Smart Energy | Commercial | Home Health Tech | Recurring Revenue | Digital Content | Retrofit
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News · Research · Home Automation and Control · Security · Spotlight · Security Spotlight ·About the Author
Jason Knott, Editor, CE Pro
Jason has covered low-voltage electronics as an editor since 1990. He joined EH Publishing in 2000, and before that served as publisher and editor of Security Sales, a leading magazine for the security industry. He served as chairman of the Security Industry Association’s Education Committee from 2000-2004 and sat on the board of that association from 1998-2002. He is also a former board member of the Alarm Industry Research and Educational Foundation. He is currently a member of the CEDIA Education Action Team for Electronic Systems Business. Jason graduated from the University of Southern California.
2 Comments (displayed in order by date/time)
I’ve actually come across a few reports that have mentioned this trend, but I am curious as to know the psychological reason for it. Do you believe that more people are taking to do it yourself home security or home security companies more so? I know a few people who won’t let anyone in to their homes to hook up these systems, so their forced to DIY. Great info though, thank you for sharing, I found you via http://www.besthomesecuritycompany.com
Page 1 of 1 comment pages
We are attempting to discover where this information, reported March 3, is from. This does NOT reflect our current forecasts and we’ve released no press release in some time.
Parks Associates will be releasing our numbers shortly. In sum, initial sales are down, monitoring is somewhat protected by inertia. There has been some rate increase…subtly and carefully by providers.
Please contact Parks Associates for our recent and accurate numbers.