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How ADT, Comcast Are Threatening Your Business

Experts agree your approach to doing business in today's economy must change.


Your retrofit work may still include converting rooms into home theaters, but you better be prepared to add other services to compete with ADT, Comcast and the like.
CE Pro Editors · July 12, 2010

Comcast wants to destroy your business - or what’s left of it. Oh, and so does security giant ADT, Intel, Cisco and some other heavyweights.

That’s the message being delivered by Rob Gerhardt, industry veteran and one of the founding fathers of CEDIA (Custom Electronic Design & Installation Association). Gerhardt has been traveling the country and delivering two-day “Remodel Your Business” seminars, sponsored by lighting control company Lutron.

In a February session outside of Boston, Gerhardt greets each of the dozen or so attendees warmly. Then, over the course of the next few hours, he tells you that your business is worthless. That no one would buy it. That it’s as good as dead.

“You’re seeing an industry that never really was an industry - and it has run its course,” says Gerhardt, two-time installation company owner, salesman, and former CEDIA president.

He points to beleaguered new construction market. “It will recover, but not to 2007 levels.” He points to increasing commoditization, and not just of TVs and video displays. “The rich will always be uber-rich, but they don’t represent a future for you.” And, he adds, you don’t want to be one of the many chasing the only millionaire home theater project in town.

Finally, he points to the problems with the contract bidding process. 

“Contracting/bidding is not selling,” Gerhardt asserts. “A long-duration project is a financial treadmill, because you need more projects to fund the older ones. And that destroys your exit strategy.”

Wait, I need an exit strategy?

Yes, Gerhardt says. You need to exit from A/V, because it is killing you. The margins are down, new construction is down, and spending is down overall from years past. The economy may be on a slow growth trajectory, but is your business? Really?

Automation at Risk

Enter Comcast, ADT and others. Last year the companies bought major stakes in a control software company called iControl. You may have heard of it. iControl’s ConnectedLife system provides an interface for home security, energy management and at some point digital home health technologies - for any web-enabled device, including iPhones and BlackBerries.

What’s the significance? 

iControl, basically, is an inexpensive home control system. Connect a few wireless light modules to it, and you have a basic lighting control system. It can interface with a security system and thermostats. It can monitor electricity and act as an energy monitor. And it doesn’t cost an arm and a leg.

ADT has started test-marketing iControl systems under its brand name, in South Florida. Three levels of service are being offered in Florida, starting at $699 and with a $47 monthly monitoring charge. That’s right: recurring revenue. Lots and lots of it.

ADT’s most basic package consists of two security contacts, a security panel and the iControl software to access it from a computer or web-enabled phone. Next up was two security contacts, two lamp modules for wireless lighting control, a thermostat and the iControl software, now controlling your energy use from afar. And the best package consisted of two contacts, two lamp modules, thermostat, two security cameras and a touchscreen.


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