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Upside Opportunity for Home Automation Services

Home automation service offerings are rapidly transforming the way consumers will monitor, secure, and control their residence. Typically delivered by more expensive, custom-installed technology, home automation is now moving into the mainstream, with many companies adding home automation to their customer services.

A number of factors are driving the new entrants into the market. Internet connectivity is one key factor.

Not only are there currently high home broadband penetration rates, as well as the potential for embedded cellular connections to connect systems, but also smartphone applications allow consumers to control and check their homes from wherever they are.

As connectivity options make the home automation systems more useful, market changes are also making home automation more affordable.

A traditional large up-front installation and equipment purchase is increasingly being replaced by monthly subscription offerings -- often bundled alongside already existing services.

"The North American market has long been the dominant region for home automation systems and now it is leading the way with managed home automation subscription services," says Jonathan Collins, principal analyst, wireless healthcare and M2M at ABI Research.

In the past two years, service providers, including telecoms, cable, security, and energy, have all launched additional home automation services for managing energy use or security monitoring to their suites of monthly billed services.

Over the next five years the managed home automation market will grow installments at a CAGR of 60 percent between 2012 and 2017, outstripping the 31 percent growth across the total market comprising luxury, mainstream, and DIY home automation deployments.

The evolution of the home automation market into the mainstream requires a raft of new partnerships. No company is able to provide all the parts, so telecom, cable, security, and utility providers are all looking to smart devices vendors, managed software providers, local installation specialists, and others to support the broad roll-out of home automation services.

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