Z-Wave Summit Offers Market Opportunities

There were smiles all around at the Z-Wave Alliance’s Fall Summit in Edison, NJ, October 23, well before Superstorm Sandy made its way ashore and wreaked so much havoc.
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There were smiles all around at the Z-Wave Alliance’s Fall Summit in Edison, NJ, October 23, well before Superstorm Sandy made its way ashore and wreaked so much havoc.

Alliance members, developers, and press gathered to hear about the specific sources of growth anticipated and where exactly these market opportunities exist.

“Home control is the next big thing,” stated Stuart Sikes, president of Parks Associates, a market research and analysis firm covering advanced residential products and consumer perceptions about these products and services.

Sikes’ presentation detailed how the target market for residential energy management and home security technologies in the United States is expected to exceed a combined 60 percent of all households by 2022, deployed by utilities, service providers, or retailers. He also cited more than 25 percent compound annual growth rate (CAGR) for connected home system bundles, including just home security and systems and home control systems, without including single product offerings with fee-based services.

The focus of Sikes’ report was how service providers are changing the race in home automation, particularly broadband providers like Comcast, Time Warner, and AT&T, which are not typical competitors for AV integrators. In a follow-up interview, he commented on how the high-end market for home automation would be affected by mass-market growth in two ways.

“Awareness across the general population will lead higher end buyers to become aware that ‘everybody's doing it,’ and, upon looking into the possibilities, will seek the Cadillac of systems—leading them to the high-end providers. So, general awareness benefits all segments of the market,” Sikes said.

And the second way high-end providers will benefit by mass market growth in demand for home automation, according to Sikes, is that, “First-time buyers of home automation may install service provider provisioned systems, find them to be rewarding, but perhaps lacking in all desired features, and begin shopping for an upscale solution—just as the beginning golfer buys her first set of clubs at the big-box retailer, then, finding that she has a keen interest in the game, decides to invest in custom-fitted clubs.”

Sikes also added that, “We do not anticipate the high-end providers moving down market,” due mostly to their lack of interest in doing so.

Parks Associates’ research also showed that consumers have substantial interest in home health monitoring solutions, which is a technology category that CEDIA highlighted prominently in its Future Technology Pavilion at EXPO 2012. Of the broadband households surveyed by Parks Associates, 42 percent find the independent living service concept appealing, and 37 percent find a vital-sign monitoring service appealing. Parks Associates expects digital health services to be provided by integrators, rather than direct-to-consumer.

This portion of Sikes’ research led pointedly to Laura Mitchell, VP of business development for GrandCare Systems, which has participated in the Future Technology Pavilion at CEDIA EXPO.

Mitchell spoke about how consumers know more about their cars than they do about their own bodies, the main premise for GrandCare’s growing technologies for older individuals who want to remain healthy in their homes as they age.

GrandCare’s “aging in place” technology has benefited from situations where senior citizens are transitioned from hospital emergency rooms to outpatient centers and eventually their own homes. GrandCare’s value add is software, Mitchell explained, meaning they work with existing protocol devices to develop unique health solutions with any range of hardware. “The key to this industry is partnerships,” she said. For CEDIA dealers, this means developing working relationships with long term care providers, outpatient centers, and other healthcare facilities.

The Z-Wave Alliance event also featured a sneak peek of a study about the impact of the smart grid on connected homes, conducted by Continental Automated Buildings Association (CABA) and summarized by Z-Wave Chairman Mark Walters. The interesting backstory to the study was how just a few years ago, utility companies expected to take the lead in home automation through the installation of smart meters. In practice, the utility companies found they weren’t well equipped to deliver broader automation services and have no interest in doing so anymore. The major take-home point of the CABA report that Walters delivered was the greater need for service providers to collaborate and create joint business models.

So from multiple angles, the Z-Wave Alliance conference drove home a great deal of positive news regarding a flood of demand and opportunities for home automation providers. Its up to custom integrators and the manufacturers that serve them to carve out an appropriate niche to go after.

For the Fall summit, Z-Wave also opened the doors to its interoperability lab for tours, marking the one year anniversary of the lab in Piscataway, NJ. The 3,300-foot state-of-the-art facility provides real world applications-based product testing for interoperability and quality. The lab is available to manufacturers and developers to create their own application-specific test beds for studying how devices communicate with each other in the real world.

Some of the devices undergoing testing there included Somfy shades, which use Z-Wave protocols for lighting, and keypad scene controllers. There was also an intriguing demonstration of technology from Infusion, a software engineering firm focused on emerging technologies. An original jukebox from the 1950s was set up with a Z-Wave control module for automation. All of the original parts were left intact, so the coin-operated device was paired to a PC playing iTunes. The jukebox would make for a great party gadget. Simply insert a coin, make a song selection, and play music from a local iTunes library.

With creative, next generation technologies tested for real-world applications and business opportunities spanning the spectrum of home automation, the Z-Wave Alliance and its members are poised for success.

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