The Budding Market of Home Automation

Revenue for the US home automation market is slated to reach 5.5 billion by 2016. In fact, home automation is the greatest technological leap forward in home technology in many decades.

A number of factors are driving home automation – wariness about energy efficiency and a desire to streamline home entertainment both play a role. Consumers are also eager to automate home security in a cost-efficient way. Perhaps this is why the field of home automation reached revenues of approximately 3.5 billion in 2011.

Demand for Home Automation

Venture capital funding is flying into promising home automation start-ups that promise to fuse convenience, security and energy efficiency for tomorrow’s customers. The plan is to deliver advanced functionality to homes across the country via distributed control systems.

Economists claim that home automation is at the high growth point of the financial life cycle. Indeed, home automation is anticipated to keep cresting at the current rate of 10% annual growth or more until 2018. By 2019, a year after this rabid growth settles down, home automation is expected to have generated nearly 20 billion dollars in revenue.

Two US companies lead the stateside transition from just alarm systems into home automation – Leviton and Johnson Controls. That said, all top home automation companies seek to digitally streamline the following areas: HVAC, entertainment, lighting, outdoor upkeep, security and home access. This means that everything from motion sensors and control systems are brought onto the same Smart technology grid as irrigation and wireless temperature control.

Movers and Shakers: Recent Acquisitions

Google made history recently by purchasing home automation start-up Nest for 3.2 billion dollars. Ironically, Nest’s co-founders were both on the original team for iPod development; in addition, the Nest indoor thermostat is still distributed at Apple locations.

Nonetheless, Google promises customers that Nest will continue to function under its own brand, not unlike what Motorola did following a buyout.

Nest ensures, for its part, to continue offering applications for Android and iOS. In other words, security features offered by Nest (Nest Protect), smoke detectors and thermostats will still is compatible with Apple products post-Google acquisition.

Gramophone Maryland / CC BY-NC-ND

Another American juggernaut, Lowes, made history this month at the Consumer Electronics Show by unveiling its groundbreaking Iris home automation system. One piece of Iris’ voice control technology known as iVee allows users to control the temperature of any room in the house with voice commands. For instance, saying “turn up the temperature in the den to 73 degrees” will actually do just that!

Continued Expansion in Home Automation

The field is expected to experience a 47% consolidated annual rate for the next four years. This eye-watering growth is made possible by ubiquitous and increasingly economical internet connections running through basic appliances like refrigerators and lights.

Companies like CPI Security and Time Warner Cable, although eager to make an impact on home automation, are largely playing catch-up. In previous years, systems were either overpriced or prohibitively techie via setup and maintenance. The next generation of home automation systems is neither too pricy nor hard to install, which is anticipated to open up home automation to a larger consumer base.

Lowes, for instance, claims that every electrical device on its shelves will eventually be compatible with its home automation system. This means that the device will not only be internet ready – it will also have its own app. When Iris came out in late 2012 the home automation system had over three dozen devices with their own apps; this will extend in the coming years due to partnerships with electronics manufacturers like Honeywell and Whirlpool.