How the iPad Will Shatter Touchscreen Pricing

Vantage/Legrand says the iPad will shatter existing pricing, software, and physical format of touchscreens.

"There will always be a place for dedicated touchscreens, but the iPad certainly breaks paradigms in the industry in terms of what it does vs. other existing touchpanels in the market," says Andrew Wale, Vantage/Legrand VP of marketing, who called home automation the iPad's "killer app."

"It's not inconceivable that the iPad will create the potential for some dealers to move away from dedicated touchscreens. But the big unanswered question is will there be available home control apps that work in an open, practical environment. It will be a challenge for dealers to find out what home control apps are available for the iPad."

"Even if the iPad has great success, there will continue to be multiple interfaces on the market: on-screen, mobile, hand-held remotes and even hard keypads are not going away," he adds. "[The] iPad is just another remote option interface for dealers to sell."

Price Pressure Will Occur

Wale believes the iPad will definitely lead to some price pressure on dedicated touchscreens. He advises integrators to emphasize that the value they bring to a client goes beyond the hardware.

"Yes, we will have to challenge ourselves on our pricing, but it does not mean every touchpanel on the market is all of a sudden going to be selling for $500," he says. "The days of earning lots of margin on touchscreens are gone. It's a tough segment already even before the iPad. You can't expect to build your integration business on product margin from tablets anyway. If you are still trying to do that, you are not going to be around long."

Wale advises dealers to establish installation and service policies for iPads and determine how they will handle installation when the homeowner buys his own iPad. Dealers also need to decide if they will service a broken iPad.

Potential Problems

Wale says dealers will face several concerns if they abandon dedicated touchscreens for the iPad or any third-party GUI:

• Integrators cannot guarantee 100 percent product performance with a third-party touchscreen
• Dealer warranties for dedicated touchscreens are an important part of the value for clients
• The iPad is not currently viable as a primary control for a home theater because there are too many buttons that will have to be pushed compared to a dedicated touchscreen

And the fact that the iPad is wireless does not make it conducive for home control of entry/exit functions, including arming or disarming an alarm system or even manipulating the lights when you arrive home. Those tasks are still going to require a fixed, dedicated touchscreen near the door.

Future of 16x9 Touchpanels

What does the iPad mean for the future of 16x9 touchpanels? The iPad is 4x3, presumably because that better suits its e-reader function. Wale says many home control manufacturers (not Vantage) have been moving away from 4x3 formats to 16x9. If the iPad is successful, it could let the air out of 16x9 touchscreens.

Vantage engineers will be going through the iPad "feature by feature," checking memory, the video card, the Apple OS, etc. And Vantage has already modeled its Webpoint software for the larger iPad screen.

"We have lots more room on the touchpanel to work with vs. the iPhone," says Wale. "[Webpoint] is ready to go once it is tested on an actual iPad [after the official release on April 3]." Wale says Vantage should have "something iPad-based" (not just apps) out by the middle of the year.

Adopting Apple's Business Model

Based on the extent of the success of the iPad, Wale believes the entire home control industry may have to look at a different business model. "Apple makes money selling apps vs. product," he says. "Our industry needs to perhaps look at the business model.

Perhaps companies like Vantage will have to unbundle its software from its hardware and then sell apps. Is that the new business model for our industry? "Who knows, but we can't just dismiss it," he says/ "That is the worst thing we can do."

Will Vantage someday open its own app store? Wale says it is something control manufacturers need to look at. "We provide apps for our products today, but it is all part of the initial sale," he says.

Wale does not believes the iPad will lead to a DIY market that bypasses the need for dealers. He sees dealers becoming more valuable. "I don't see homeowners integrating home controls functions on their own," he says.