Top 2012 Trend: Low-Cost, Self-Contained Home Automation/Security Systems
2Gig, Interlogix, Honeywell, Alarm.com, others are popularizing self-contained wireless home automation/security systems that install quickly and collect RMR.
Self-contained systems is one of CE Pro’s Top 5 Home Technology Opportunities for 2012. We will be profiling each trend over the next week as part of our State of the Industry Report.
Once upon a time there was a strict dichotomy between security and automation systems. The two must remain separate but integrated, it has been argued, in order to maintain the integrity of the security system.
But in 2011 we saw an explosion of self-contained systems that blur the line between security and other home technologies, integrating all of the major smart-home functions into a single device that can be slapped onto a wall, programmed in a jiffy, and left pretty much alone to collect recurring monthly revenue (RMR) for years.
Products in this evolving category vary in the extent of their integration, but most include:
- Security CPU and back-up battery as required by UL
- Wireless technology for communicating with security sensors
- Built-in cellular radio for communication with the central monitoring station
- Z-Wave or ZigBee for integrating with lights, thermostats and other home-automation devices
- Wi-Fi or hard-wired IP for communications with a central station, integration with local cameras, remote access via web browser, or display of news, weather and other Internet feeds
- Touchscreen or keypad for programming, feedback, user interaction and possibly Internet feeds or camera views
- Two-way voice for communicating with the central station
- Camera integration supported through system’s own web server or via a SaaS (software as a service) provider.
While manufacturers and dealers have sold self-contained systems since the mid-1990s, when ITI (later Interlogix and GE Security) launched its Simon product, the movement was popularized in the past couple of years by 2Gig Technologies and its biggest customer, Vivint (formerly APX). Vivint sells/installs the self-contained 2Gig system for roughly 200,000 customers every summer, when its army of young salespeople go door-to-door across the country.
Now traditional home systems integrators are picking up the line. Worthington Distribution, which has sold traditional security systems for two decades, has never seen them fly off the shelves like they do today with 2Gig.
A Hot Market
2Gig, DMP, DSC, Honeywell and Interlogix all are shipping low-cost, self-contained security/automation systems, while HAI and Napco are avoiding that product category.
The market is heating up for traditional home systems integrators, who are mostly accustomed to selling and integrating higher-end security systems. While they still are on the prowl for higher-end dedicated security solutions for their integration projects, they seem to grasp the potential of low-cost self-contained systems.
In a 2011 CE Pro flash survey of home systems integrators, 41 percent of respondents said they were “in the market for new products/services” in the category of self-contained security/automation systems. That compares with 35 percent who said they were shopping for a PERS (personal emergency response system) provider and 15 percent seeking mass-market security systems.
“A motion [sensor], two doors and a panel can be done in less than 20 minutes,” says owner Richard Scholl.
Accompanying a dealer at a job site, Scholl explains: “He just hung the panel on the wall, dropped a wire inside the wall, fi shed it out and plugged it in. He took out each security sensor, wrote down the number and had it running right then and there.”
2Gig is just one of the self-contained security systems on the market. All of the major security companies offer them, with Honeywell providing one of the broadest ranges of products and services. Like 2Gig, Honeywell employs a cloud-based (SaaS) service for remote access and management. 2Gig uses the popular Alarm.com service (also compatible with GE/UTC/Interlogix security panels); Honeywell uses its own Total Connect platform.
The Lynx Touch is Honeywell’s third-generation self-contained security system, featuring a 4.7-inch touchscreen, built-in IP or GSM radios, Z-Wave communications, slideshow capabilities, and two-way voice that is “even better than before,” according to Robert Puric, director of product marketing for Honeywell Residential.
SimpTech Solutions in Florence, Ky., is one convert to self-contained security/automation systems. The company spurned security for many years, worrying about the liabilities. But once owner Chad Nichols crunched the numbers on self-contained systems and their associated recurring monthly revenue (RMR), he dove right in.
SimpTech charges $40 to $60 per month for each job. That compares with $25 to $29 per month typically collected for basic landline-enabled security installations. “We’re selling a $2,500 security system that provides great security, but also energy savings and a lived-in-look [via lighting automation],” says Nichols. “We would have to charge $10,000 with a typical control system.”
2019 State of the Industry Special Report - CE Pro Download
The custom electronics industry saw a healthy 8 percent growth rate in 2018, down slightly from the blazing 11 percent growth in 2017 but still admiringly strong. Our 2019 State of the Industry indicates that readers expect to see even more growth in 2019. Get your copy today.
Julie Jacobson, recipient of the 2014 CEA TechHome Leadership Award, is co-founder of EH Publishing, producer of CE Pro, Electronic House, Commercial Integrator, Security Sales and other leading technology publications. She currently spends most of her time writing for CE Pro in the areas of home automation, security, networked A/V and the business of home systems integration. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, earned an MBA from the University of Texas at Austin, and has never taken a journalism class in her life. She's a washed-up Ultimate Frisbee player currently residing in Carlsbad, Calif. Email Julie at firstname.lastname@example.org
Security4 Adhesives Every Technician Should Have in Their Truck
Product Briefs: Rutherford Audio, Goldnote; ProSource adds Dish; Sonos Joins D-Tools i3
ADT Ends Pulse, Adds Command & Control, Pauses Alexa Guard, Plots DIY
Shelley’s Stereo Upgrades Showroom Network, Improves Cybersecurity
SnapAV Acquires MRI, Adding 4 NE Locations to Growing Distribution Empire
View more on Security