Security Market Primed for Change
For many years, the home security market was just that—secure. For over a decade, home security has maintained a 25 percent penetration rate in U.S. households—mostly made up of an upper-class clientele. Recently, Smart Home innovations and the emerging Internet of Things have stirred the pot, creating a recipe for a shake up. Not only in the area of mobile apps and Do-It-Yourself (DIY) solutions, but also speculation about Google’s purchase of Nest Labs, talk of Apple iHome, and the entrance of big cable and telecom players to the market. As the automated home environment evolves, home security is transitioning from being a complete, discrete system into being one app among many in a multifunctional ecosystem. With all this in play, it’s a critical time for established home security providers to strengthen and expand their position in home security as a foot in the door to the Smart Home of tomorrow.
Home security has held fairly steady at 20-25 percent market penetration over the years, and is expected to grow 2-3 percent annually through 2016. By contrast, the Smart Home market – which will include products for automated and remote control of energy, entertainment, health and lifestyle – is expected to grow by double-digits. A study by Parks & Associates forecasts that as soon as 2017, more than eleven million households will have some type of Smart Home controller, up from an estimated two million in 2013.
In its current state, the home security segment has an unmatched leader in ADT, which corners a fourth of the market. The other top players are Protection1, Monitronics and Vivant, which make up the next nine percent. The remaining two-thirds of the market include bigger companies like Comcast XfinityHome and Time Warner Cable IntelligentHome, along with a crowd of smaller regional players and DIY solutions. Until recently, there hadn’t been much disruption in this market and the established order ruled.