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Frost & Sullivan: Tablet Computers Rejuvenate European Home Automation Markets
Frost & Sullivan 2011/2/14

This study provides a full analysis of the European market for home automation systems, looking at market forecasts, distribution channel analysis, competitive dynamics and technology development. Drivers, restraints, challenges and a full analysis of the anticipated future opportunities are also presented. This market is very much in growth mode, but is also at an interesting junction with technology convergence and new participants making an exciting and uncertain landscape. Home automation is still a small market compared to the non-residential market for building management control systems. However the market for home automation has a great potential to realize a higher penetration level going forward.

This study provides a full analysis of the European market for home automation systems, looking at market forecasts, distribution channel analysis, competitive dynamics and technology development. Drivers, restraints, challenges and a full analysis of the anticipated future opportunities are also presented. This market is very much in growth mode, but is also at an interesting junction with technology convergence and new participants making an exciting and uncertain landscape. Home automation is still a small market compared to the non-residential market for building management control systems. However the market for home automation has a great potential to realize a higher penetration level going forward.

This research service titled “European Home Automation Markets” provides a comprehensive analysis of key industry challenges and trends, in addition to evaluating the market size and providing revenue forecasts. In this research, Frost & Sullivan's expert analysts thoroughly examine the following markets: luxury and mass home automation segments.

Introduction of Tablet Computers Gives Fillip to Home Automation Market
Offering an easy-to-use and install home automation system has been a fundamental challenge facing manufacturers. Designing a control panel that can offer a wide range of complex features, but in a way that makes control simple and easy to learn, is an essential factor to success in the market. Over the recent years, manufacturers have achieved significant improvements on this aspect. As a result, home automation systems are becoming increasingly simpler for both end users and installers, driving the market forward and reaching a wider audience.

“Home automation has witnessed major changes over the recent years; the most significant has been the introduction of tablet computers which are having a major impact on the home automation market, particularly the luxury segment,” said the analyst of this research. “So far the market has satisfactorily addressed the new developments and is set to benefit from these advances in a manner that will promote home automation and make it available to a wider customer base.”

One of the key differentiators between the luxury home automation system and a simple system is the user interface. In the past, luxury home automation companies dedicated large resources and R&D efforts to developing the user interface in order to offer an easy-to-use interface. “Now, with the introduction of tablet computers, initially by Apple and followed by other players, the market will soon be inundated with tablet computers used as a user interface with inexpensive, easy-to-develop home automation applications,” the analyst said. “This will have a positive impact on the home automation market, as touch screen user interfaces are becoming largely affordable to a new segment of end users.”

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R&D Focus Should be on Developing Software Applications Rather than Hardware User Interfaces
Currently, home automation systems are lifestyle products that are considered nonessential by many end users. Moreover, property developers are often cautious of investing in home automation systems, refraining from adding further cost, which might not be perceived by end users as an added value to the property. “Besides, other lifestyle products from ICT and home entertainment can be considerably cheaper, particularly since home automation lacks the economies of scale that is achieved in the ICT market,” said the analyst. “This puts pressure on home automation players to further drive down prices”

Home automation systems are not particularly inexpensive products. However, prices of home automation have been declining due to various factors including increasing competition among market participants and the pressure on manufacturers to reduce profit margins during the economic recession. Nevertheless, the most important factor that has impacted home automation system prices is the introduction of the tablet computer which offers the promise of substantially reducing the cost of the overall system, particularly in the luxury segment of the market. This makes home automation more affordable, boosting sales of the mid-range product segment.

“Apple's iPad is already having a huge impact on the luxury segment of the home automation market,” said the analyst. “Using a touch screen tablet computer as a user interface can save up to 50 percent of the home automation system price; home automation manufacturers should therefore shift their R&D focus from hardware user interfaces to software applications and embrace the new technology.”

Expert analysts thoroughly examine the following market sectors in this research:
● Luxury home automation 
●  Mass home automation

By Geographic Region 
●  Germany 
●  United Kingdom 
●  France 
●  Italy 
●  Spain 
●  Benelux (Belgium, Netherlands and the Luxemburg) 
●  Scandinavia (Denmark, Finland, Norway and Sweden)

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