Get Smart ...

Yes, I was thinking about Maxwell Smart, Agent 86, from the classic 1960s comedy as I came up with the headline for this blog, and more specifically, all the devices he and his sidekick Agent 99 used to fight the international organization of evil, KAOS.

Remember the shoe phone? Or the coin-operated door? How about the lipstick remote control? Or the pencil listening device?

Flash forward more than 50 years. Just think if Agent 86’s devices were “smart,” life would have been a lot easier for himself, Agent 99 and the rest of CONTROL as they battled KAOS for the better part of five years.  

Smart home devices have become prominent players in the residential landscape for almost a decade now. Whether it’s a TV, a streaming device, or a security camera, homeowners are “getting smart” when it comes to the technology they purchase due to a variety of factors, including enhanced entertainment, convenience, safety, and of course, security.

In fact, according to new data from International Data Corporation (IDC) released this week, the total value of three emerging categories of products – smart home devices, augmented and virtual reality headsets, and wearables – is expected to reach $369.6 billion by the end of 2021 and swell to $524.9 billion by the end of 2025.

The value of smart home solutions represents $289.9 million of that $369.6 million projected total for 2021, with a projected value of $400.3 million expected by the end of 2025, a five-year compound annual growth rate (CAGR) of 10.1 percent.

"The underlying driving force of the smart home and smart office market is services," said Adam Wright, senior research analyst for IDC's Smart Home and Office Devices team. "While device elements such as design and reliability are necessary for success, differentiation and margins lie elsewhere. Connected consumer products are accelerating the consolidation of value in services while diminishing the margins in the devices themselves. The breadth, depth, uniqueness, and quality of data sets will increasingly determine the value potential of a smart home vendor, and as device margins are pressured, the role of devices will largely be relegated to vehicles for service delivery."

Let’s look at home security and its emergence as a smart option for homeowners who want peace of mind 24 hours a day. A whitepaper recently released by research firm Parks Associates, “Home Security: A Redefined Market,” revealed that overall, slow and steady growth continues for adoption of home security systems and professional monitoring.

“In recent years, adoption of security systems has experienced growth even in the face of attrition continuing at an average rate over 12 percent,” the report stated.

Another key factor impacting the smart home security market is the COVID-19 pandemic, according to the Parks Associates report.

“COVID-19 has redefined the market for security and related smart home devices, with both positive and negative factors emerging in this new environment,” the whitepaper pointed out. “From the very beginning of the pandemic, many people, unwilling to risk exposure to COVID-19, have avoided circumstances where an installation or repair technician would enter their home. This cramps growth for traditional security systems but heightens the willingness to acquire self-install security systems.”

The emergence of DIY security systems was outlined in the report, with the self-installation of newly acquired security systems increasing from 40 percent in Q4 2018 to 55 percent in Q2 2020.

Parks Associates President Elizabeth Parks detailed the rise in DIY home security products during last week’s ESA Leadership Summit in Texas. Her breakout session, “Dealer Perspective: The Evolving Home Security Market,” pointed out that more opportunities will rise from the emergence of DIY products, calling DIY a “foot in the door” for professional services.

What do all of these findings mean for the future of smart home technology, and security systems specifically? As we’re still in the midst of COVID-19, homeowners may continue to embrace DIY security products for now, along with their other smart devices and services, with the hope that there will be a period of growth once normal business returns, and security dealers will reemerge to provide installation and services they are accustomed to doing.

In the meantime, with the continued technology innovations, innovative partnerships, and integrations between products and services taking place in home security, the Parks Associates whitepaper concluded, “Security dealers need to continue to seek solutions that are unified, have low support costs, and that provide value for the customer.”

Safe to say that “Get Smart” has taken on a whole new meaning.