In-Stat/MDR Reports Many Vendors Fight for Control of the Smart Home Network Market

Business Wire, Nov 4, 2002

Business Editors/High-Tech Writers

SCOTTSDALE, Ariz.--(BUSINESS WIRE)--Nov. 4, 2002

The penetration of Internet access and the emergence of home networks are paving the way for a new breed of revenue-generating opportunities for service providers, utility companies, security installers, homebuilders, and white good appliance manufacturers. Smart home networks, which use a variety of technologies and standards from basic X-10 power line networks, to fully automated high-end proprietary and wireless systems, are creating new business models for mass market penetration. However, In-Stat/MDR (http://www.instat.com) reports that, despite the availability of technologies and standards in the smart home networking market, there has yet to be widespread acceptance of common standards and strong consumer demand. This has lead to a challenging year in 2002, as many of the strong vendors focused entirely on smart home revenue in 2001, have been acquired or have gone out of business.

"While the growth in smart home networks is not up to par with what was believed in 2000, there is still room for growth, especially with the involvement of industrial automation vendors, such as Echelon and GE," said Jaclynn Bumback, an analyst with In-Stat/MDR. "Further, ZigBee, a new low-power wireless technology, could enable smart home networks wirelessly at low consumer price points." There already exists limited demand for home automation for high-end homes, and as an add-on to security services. However, despite this limited initial demand, silicon, hardware, software, and service providers do not appear to be ready to market these types of services to the mass market. "While this market is positioning itself for rapid growth, there are a number of hurdles, which need to be overcome by the entire industry," said Bumback. "Pricing and interoperability must be resolved for the smart home networks to gain mass market acceptance. This includes creating low-cost silicon transceivers and embedded networking solutions, in addition to hardware and software for enabling interoperability between disparate technologies."

In-Stat/MDR has also found that:

-- Revenues for smart home controllers and nodes are expected to reach nearly $1.9 billion by 2006, up from around $300 million in 2002.

-- As Microsoft pushes itself into the market through its Universal Plug and Play standards and home networking software, more consumers will learn of the benefits of smart home networks, while using platforms that are easy-to-use for novice computer users.

-- Currently, only three main standardized technologies for smart home networks have achieved any significant deployment: X-10, CEBus and LonWorks. X-10 is the most widely deployed communications technology for home automation.

-- While smart home networks will originally exist as "islands of

connectivity," using many different transmission technologies

for varying applications, smart homes will migrate to a

unified network using bridges to connect disparate

technologies.

The report, "Smart Home Networks: The Fight for Control" (#IN020244RC), forecasts the smart home networking market through 2006, segmenting between various market channels including utility, homebuilder, security and retail. Forecasts of smart home network controllers and nodes are given, including associated revenue, and also subdivided by market channel. The report includes analysis of the major market trends driving growth in the smart home market, and analysis of the various smart device technologies competing in the home. Profiles of companies involved in the smart home market, ranging from technology developers, system vendors, and silicon manufacturers are provided. To purchase this report, or for more information, please visit: http://www.instat.com/catalog/cat-rc.htm or contact Erin McKeighan at emckeighan@reedbusiness.com; 480/609-4551. The report is priced at $3,495 USD.

In-Stat/MDR (http://www.instat.com) offers a broad range of information resources and analytical assets to technology vendors, service providers, technology professionals, and market specialists worldwide. The company stands alone in its ability to integrate both supply-side and demand-side research methodologies into a single comprehensive view of technology markets and products. This capability relies on a unique ability to cover the entire value chain from engineering-level technology, through equipment, infrastructure, services and end users.

In-Stat/MDR is part of the Reed Electronics Group, a division of Reed Elsevier (www.reedelsevier.com), a world-leading publisher and information provider. With over 38,000 employees worldwide, Reed Elsevier operates in the science & medical, legal, education and business-to-business industry sectors, providing high value and flexible information solutions to professional end users, with increasing emphasis on the Internet.