The residential alarm monitoring market has faced some difficulties as a result of the coronavirus pandemic, but the negative impact is expected to be short lived. New product releases have also been temporarily affected by the pandemic.
Home security, including residential alarm monitoring, have historically done okay during times of economic crisis, but the coronavirus pandemic is a first for modern times, and even typically recession-proof markets have taken a hit. Luckily, market researchers believe these impacts to be short-lived in the home security sector, with there even being growth opportunities in the post-COVID-19 world.
Short-lived impact on residential alarm monitoring segment
Brad Russell, Research Director,
Connected Home,
Parks Associates
Growth for the global residential alarm monitoring market is expected remain flat this year, as a result of the pandemic; however,
Omdia expects growth to return to near pre-coronavirus levels by mid-2021.
The
macro impact of COVID-19 on the residential alarm monitoring business has been fragmented, according to Blake Kozak, Senior Principal Analyst of Smart Home and Security Technology at Omdia.
“Countries with more extreme lockdown measures experienced greater negative impact than those with fewer restrictions. For instance, in the United States, limitations on door-to-door sales impacted the summer business for some alarm monitoring brands that rely on these tactics. Also, telcos from France to Canada to the United States put notices on their website regarding delays in installations and in-home support of smart home and alarm monitoring services,” Kozak explained.
A recent survey by Omdia found that 60% of respondents responded negatively when asked whether COVID-19 has made them want to
work from home full time. This is good news for the residential alarm monitoring market since security alarms will likely have greater perceived value to monitor empty homes or properties.
Limited new product releases for 2020
Parks Associates highlighted that there were a limited number of new security-related, smart home product releases in the first half of the year due to COVID-19. Brad Russell, Research Director for Connected Home at
Parks Associates, observed that this could indicate that smart device brands are operating their businesses conservatively as they navigate the uncertainties brought on by the pandemic. He added that manufacturers are also struggling with supply chain interruption as a result of the public health crisis, which also may be restricting product releases.
“More than eight door lock brands announced pending product releases between Q4 2019 and CES 2020. However, only Kwikset and Level Lock have since released products. Product releases did pick up in Q3 with
new video doorbells from Ring, Nettamo, Arlo and Wyze. A few other
video doorbell brands announced pending product releases in 2019 or at CES 2020, but have not yet come to market,” Russell said.
Smart home faces temporary slowing
At the end of 2019, Parks Associates found that smart home control system adoption stood at 18% of US broadband households. Now, with the uncertainty of an intertwined public health and economic crisis, and imminent public election, Russell explained that the market outlook for the smart home industry is characterized by the same uncertainty.
“In a survey that closed the first week of April 2020, Parks Associates found that three out of four consumers say they are ‘cost conscious’ as a result of COVID-19. Job loss, furloughs and paycheck reductions will challenge consumer purchasing. On the other hand, some devices and services are benefitting from the tailwinds of consumer concern for health and safety, increased time at home and commensurate desires for comfort, convenience, and time for upgrade projects,” Russell explained.
Furthermore, the perception of high prices continues to be the leading inhibitor for smart home device purchases. Whereas before companies would first introduce an advanced model of products to innovators and early adopters, and then maybe come down-market with a simpler, low-priced model, increased competition is driving industry players to integrate high-end features directly into their most affordable models. This, according to Parks Associates, will help consumers to see more value per dollar spent.
Home security providers remain confident
Despite these disruptions, industry leaders remain confident. Russell believes the reliability of the security industry’s recurring revenue business model, the growing consumer demand for security and smart home solutions, and
dealer adaptations to the changing business climate will still deliver resiliency relative to other industries.