It’s been quite a year for the U.S. home security industry. As we end the old year and ring in 2015, here’s a brief overview of the topics that made the cut for my Top 10 in 2014.
1. Google Buys Nest for $3.2 Billion — This was one of the biggest stories of the year. Did this purchase signal a potential move into actual monitored home security, or just a foray into the Smart Home? The jury is still out on that question – although the next topic in this post adds a little clarity.
2. Nest Buys Dropcam for $555 Million — As if it wasn’t enough for Google to buy Nest, the newly-acquired-Nest made its own headlines with the purchase of smart video provider Dropcam. No wonder there are some traditional home security companies that are getting nervous about these new players! Frankly, if you operate in this industry and you’re not offering a full range of interactive services and smart home applications you run the risk of being left in the dust.
3. Door to Door Alarm Sales Reached a New Low — Warnings on door knocker alarm companies are all over the internet. The Better Business Bureau, local police departments, and even the Federal Trade Commission have advised consumers to think twice about opening their doors for that aggressive and potentially deceptive pitch. But the latest trend in fraud is for door knockers to steal the customers of other alarm companies – called “slamming” – by pretending to represent your existing company when they come to the door. Let them in, and they’ll replace your equipment, and have you sign a new agreement: now you are paying two monthly bills. It’s gotten so bad that ADT, whose customers are considered especially susceptible to this approach, has offered a $25,000 reward to stem the tide of slamming.
4. Apple Announces HomeKit — Google was not the only mega-player to make news with a move into the world of smart home technology. The innovative folks at Apple made their own announcement about a new programming and integration platform, called HomeKit, which would enable devices in the home to speak to each other. Not to mention take advantage of all the cool existing Apple features and functions, such as Siri. The details are a bit sparse so far, but Apple has the resources, and the incentive, to make a serious impact in this space.
5. AT&T Buys DirecTV — AT&T has caused quite a stir in the alarm industry with its own offering of monitored home security and home automation services. With the purchase of DirecTV, which offers its own platform for home security and home automation services, the competitive landscape for alarm companies just became even more interesting.
6. Net Neutrality Hits the Alarm Industry — Recent headlines about net neutrality have sent ripples across the nation regarding the notion of free and unfettered access to Internet services. At risk is the idea that everyone will have access to the same content, at the same speed, as we have enjoyed up until now – and that is because there are some who feel it’s fair and appropriate that the providers of the Internet “pipe” into your home should be allowed to prioritize their own traffic. It’s quite the debate, in Washington, DC, and elsewhere, and there are repercussions for the alarm industry.
7. New Entrants (Cable and Telecommunications) — As mentioned above, AT&T is just one of the cable and telecommunications (Telco) providers that has jumped into the home security business. While many of these new entrants are having an impact, things are not going as well as planned. The general consensus is that they are growing consumer awareness – and that is good news for everyone.
8. Comcast to Acquire Time Warner — Probably the biggest story to hit the cable industry in 2014 was the announcement that Comcast agreed to buy Time Warner, which would create by far the largest cable provider in the U.S. The planned acquisition has sparked many debates, not the least of which is whether such a merger is in the best interest of the American consumer. And since both companies offer home security and home automation services, there are ramifications for our industry as well. For now, the FCC (Federal Communications Commission) has put a hold on the deal – but we expect the deliberations to continue again in 2015. Stay tuned for news on that one!
9. It Starts with Home Security — Lowe’s sponsored an in-depth study and survey of U.S. homeowners, to get at the real reasons why so many people are interested in home automation. The results indicate that what most homeowners want peace of mind, and that begins with home security. Home automation may be a convenient add-on, but definitely comes in at second place.
10. Strong Industry Forecasts for Growth – 2015 is sure to be a big year for those in the home security industry. Two very detailed forecasts shed insight into the year to come. The first report addresses physical security, where the market is expected to reach $88 billion by 2019. In the second report, the market for home automation services is expected to reach $48 billion by 2018. Looks like the change in the industry is just getting started.
With such an exciting 2014, we’re really looking forward for what changes will be coming in the new year.
If you’re also interested, stay tuned later this week for a word from Gilbert Cho on what he predicts to be the biggest trends in 2015. It’s sure to please.
I wish all of you a safe and secure 2015!