In 2013, the alarm market was particularly active in the residential sector, driven by both lifestyle and security needs as home automation technology brings opportunities to the market. Accordingly, MarketsandMarkets expected the home security solutions market to reach $34.5 billion by 2017 at a CAGR of 9.1% from 2012 to 2017.
Home automation reinvigorates the intruder alarm market
The home automation market is gaining traction and the growing trend to integrate home automation and home security systems into a single platform is reinvigorating the intruder alarm market. IMS Research, an IHS company, stated that the residential sector accounted for 40.7% of the $2.7 billion global intruder alarm market and is forecasted to be one of the fastest-growing verticals with a five-year CAGR of 5.3% from 2012 to 2017.
In the U.S., in particular, “The World Market for Intruder Alarms” report by IMS highlighted that the US residential security sector is heating up quite nicely. The study noted that the penetration rate for US residential intruder alarm products will increase by 5 to 8% during the next three years, from the current penetration rate of 20%
At the same time, however, because the core of any home automation system is a basic intrusion alarm system, the growing penetration of home automation systems are giving the matured markets a much required boost. Regionally, home management integration is gaining the most popularity in North America, thereby boosting the penetration rate of intruder alarm products into the residential sector, observed an IHS analyst. Europe is listed as a close second, as energy management features are a growing trend, due to rising energy costs and the desire to leave a smaller carbon footprint.
As the market broadens, what used to be just security is very much becoming the connected home, so the opportunity for growth is substantial, noted David Gottlieb, Director of Marketing Communications at Honeywell Security.
“There is no doubt that the birth of the connected home has given the residential alarm a boost in recent years. Not only has the boom in IP-enabled devices and applications and consumer's wireless connectivity helped to transform how homeowners use technology within the home, but it has also helped to further define an intrusion and home security system as a more user-friendly, proactive tool,” agreed Stephen Meagher, Director of Product Management — Interactive Security Services at Tyco Security Products.
Video Verification of Intruder Alarms Grows
Another factor driving the intruder alarm market in Europe is updated regulations. The European standard, the EN50131 series, has been accepted by the insurance industry. Accordingly, the Association of British Insurers is encouraging its adoption.
The EN50131 series sets a grading system for installations and maintenance schedule. It further guides the prioritizing of responses from local law enforcement. In Europe, the EN50131 standard is already driving the adoption of video verification. Governments are increasingly requiring alarm systems to be equipped with video verification for more efficient law enforcement, although the deadline for mandatory adherence varies from country to country. For example, 70 percent of the market in Spain is already deploying video verification and in the Nordics, it is more than 50 percent, noted an industry expert.
The growing popularity of video verification of intruder alarms is due to a number of reasons, but a key factor is the benefits it brings to all parties involved. Video verification helps combat the false alarms issue common with traditional alarm systems, enables more effective and faster police response, saves the customer from paying fines, and generates recurring revenue for the provider.
Finally, there is a possibility that the European intruder alarm standard might have significant impact over the global intruder alarm industry, but it is mostly concentrated in Europe at the moment.
Final Words
The intruder alarm industry appears to be in good health, as the industry saw a rebound in matured markets, driven by home automation and video verification trends. In 2013, the security and home automation markets picked up their pace in their relationship. No doubt the rebound in new home construction and consumers' home improvement and lifestyle appetite contributed to this growing trend. Similarly, video verification reduces false alarms and enables the intruder alarm system to be smarter. The market is keen on this uptake as it saves time and allows for more customer satisfaction.
In 2014, forecasts for the global intruder alarm market continue to be positive. There is also a general inclination to upgrade existing systems.