With the wireless industry experiencing a bit of a slowdown after over 10 years of strong growth, a number of companies are seeking new markets and businesses. AT&T (NYSE:T) is about to enter the home security and automation arena, launching its new service in 15 U.S. cities on Friday.
According to Venture Beat, this initial launch had actually been planned for only 8 markets in March. But after running initial tests, AT&T actually expanded these first markets to 15.
The launch will include Atlanta, Austin, Boulder (Colorado), Chicago, Dallas, Denver, Houston, Los Angeles, Miami, Philadelphia, Riverside (California), San Francisco, Seattle, Saint Louis, and portions of New York City and New Jersey. If all goes according to plan, the service will be rolled out to 50 markets by the end of the year.
This automation service will be sold in cell phone stores for an initial price tag of around $250 for the actual equipment. There will also be an ongoing monthly charge of $40 for monitoring the network and system. The main equipment will tie into a central control panel that controls the system throughout the home. This can be programmed with an app on the customer’s phone or even with an online interface.
This means, unlike with other home security and automation products, the customer is not forced to have AT&T wireless as its phone or Internet provider. In fact, the service will work with any type of Internet connection, although a wired Internet connection is important for redundancy, as the Huffington Post reports.
The basic plan is for simple home security and includes around the clock monitoring. In addition to the main control panel, customers will receive a wireless keypad (normally placed near the front door or main entry point of the home), a remote control keychain device, recessed sensors, and an indoor siren to alert the inhabitants of any danger.
Additional options add even more devices and protection to the home. These can include items like motion sensors, glass break sensors, a smoke sensor, and a carbon dioxide sensor, as USA Today reports
There are even packages that can accommodate remote door locks, live video cameras inside and outside the house, water leak detection and shut off, and remote control of thermostats, lights, and appliances.
Home Security
The home security industry in the U.S. is valued at an estimated $18 billion per year. This segment has long been dominated by companies such as ADT (NYSE:ADT), though recently other phone and cable companies that have been marketing and selling their own proprietary automation products and systems to their own customers.
The key difference here is that AT&T is actually developing its own technology, not making its telephone or Internet services a requirement.
Despite the fact that only about 20 percent of U.S. homes have any type of security system, the home automation industry has already been experiencing strong growth. According to a report issued by the Air Conditioning and Heating News, the number of home automation systems installed in the U.S. during 2012 was almost double that of the previous year.
The report expects that by the year 2017, there will be more than an additional 8 million systems installed. That would mean a 45.2 percent compounded annual growth rate.
Other entrants into this market include Verizon (NYSE:VZ), Comcast (NASDAQ:CMCSA), and even Time Warner (NYSE:TWX). All of these companies have already begun expanding their interests and involvement in home automation.
Other long-time home security and automation stalwarts ADT and Vivint are also seeing strong and rising demand for their automation services.
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Automation Market
One of the most interesting things is that automation certainly does not need to be confined to the home. The same technology has a wide range of applications in a number of other fields, including robotics. Companies such as Nautilus Minerals (TSX: NUS) and Neptune Minerals, for example, are using automation to help mine the ocean floors in search of gold, silver, and other precious metals.
Automation is also currently being used in hospitals in a number of areas. Surgical automation systems boast of benefits such as a lower risk of infection, less blood loss and scarring, and even quicker recovery times for patients.
And automation is also responsible for the advancement of military defense. Drones are currently being used more extensively than at any other point in history. Technology and automation has made it possible to actually send these unmanned aerial vehicles into any desired area to obtain intelligence through surveillance. One of the leading companies in this field is AeroVironment (NASDAQ:AVAV).
There are even robots designed to help people clean their houses. As an example, take a look at the Roomba, developed by iRobot (NASDAQ:IRBT). There are actually a number of other companies in this field, like Evolution Robotics, that might present interesting investment opportunities for those willing to get involved.
Of course, the biggest initial winners in the area of automation are likely to be the aforementioned home automation and security companies. It should be interesting to see how effectively AT&T can break into this market, given its size and economies of scale. The company certainly sees this as another billion dollar market.
And as more and more consumers see the benefits of automation, this should only lead to an increased interest in these types of products.
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