Unlike other more public-oriented verticals, the residential vertical is one that is localized the needs of each region can vary vastly. It thereby makes sense to view regions separately rather than as a whole. A&S takes a look at markets in the Americas and within India.
IMS Research estimates the world residential market for intruder alarms at US$1,162.3 million in 2007. This figure does not include any revenues generated from installation, service or maintenance. The world residential market is growing at a CAGR of 6 percent. The residential vertical cannot yet report values on a par with those in the financial and other verticals, but with U.S. revenues set to hit $12.5 billion by 2012, vendors and end users the world over are following trends and waking up to the potential it represents.
Frost & Sullivan has predicted that the U.S. residential market will hit $3.21 billion by 2009. Currently, the total U.S. alarm-monitored population is estimated at 32.3 million, which represents a national penetration of 23 percent. Moreover, Parks Associates has predicted the widespread implementation o f bro adband and inc re a s ed consumption of digital media: ¨When consumers acquire one system at home, whether a security system, home theater or multi-room audio installation, they are often prompted to install other systems as well.〃
¨It's a business adage and certainly one that applies to security,〃 said Michael A. Miller, NBFAA (National Burglar and Fire Alarm Association) President Elect, when asked about the 2008 economic downturn which has kept the business world busy worrying about future prospects, ¨that when the economy is going well, business can be expected to do better than when the economy is struggling. Having said that, security businesses can still grow even when the real estate sector is slow when ROI is proven, the end user still benefits. Statistics show that although number of burglaries in the U.S. has decreased, incidents of violent crime have increased.〃
Notable manufacturers in this vertical are Honeywell, GE, Napco, and Bosch. Distributors with largest market share are ADI and Tri-Ed, with smaller regional distributors operating throughout the nation. Systems integrators include ADT, GE, Monotronics, Protection One, and Stanley. Popular video surveillance brands are numerous, some of which are Honeywell, Pelco, GE, Dedicated Micros and Kalatel (GE). Celso Calazans, Security Systems Educator at Emforvigil SA Brazil, added DSC, FBI, and Paradox to the list.
Penetration of IP-based intruder alarm systems has not reached 5 percent, Miller echoed E.U. security experts. ¨Within the area of the current intrusion systems penetration, there is a legacy issue getting end users to upgrade to new systems will take some time. The situation can also be explained through redundancy and related technology issues.〃
Industry experts are also expecting an increase of demand for home health monitoring solutions such as PERS (personal emergency response system an electronic device designed to summon help in an emergency). ¨This is a market still in its infancy but with huge potential, as forecasts show an up to 30 percent elderly citizens population by 2030 in many parts of the world,〃 said Avi Shachrai, CEO and President of Visonic Group. ¨The cost of healthcare is very high today due to the shortage of doctors, nurses, and hospitals. Elderly citizens today wish to stay at home rather than in hospital, partly due to the higher standards of living and the higher expectations which come with this, and partly due to higher life expectancies.〃
Parks Associates agrees, having found that the intensity of demand for PERS compa red to othe r home health monitoring systems including motion monitoring sensors, vital sign devices and utility sensors is by far the greatest. The most advanced products on the market serve as the hub of all homecare applications, said Shachrai. A fully wireless panel not only receives signals from a large variety of detectors and sensors such as smoke, flood, carbon monoxide, motion, and emergency detectors all making up the social care offerings of the device but it also connects to the call center in the event of an emergency for two-way communication.
According to the Security Industry Association (SIA), while residential makes up 12 percent of electronic security market share in Brazil, in 2012, this vertical is anticipated to increase to 16.4 percent. ¨Each country has threats of a different category,〃 said Edgar Betts, Associate Director of Smart Card Alliance Latin America (SCALA). The most basic security threat in buildings and communities is physical access control. The higher the number of residents in a community, the higher the danger of intruders accessing the premises and common areas is.〃 Smart card suppliers include Brazilˇs G&D Burti and IntelCav.
The main players in residential security in India are Honeywell, Bosch, GE, and DSC, explained Kamal Arora, Head of Marketing for South Asia, Honeywell Security. Eureka Forbes is the leading installer/integrator: it sells door-to-door and has the largest central monitoring station network in the country.
The Indian real estate market is set to grow by 45 percent annually. However, the residential vertical was a miniscule one until a mere two years ago. This is now changing, in part due to the increasing prominence of nuclear families as opposed to extended families living together. Other reasons for the Indian situation until recently have to do with lack of government regulations, and the fact that CMSs were almost non-existent Group 4 Securicor covered three cities, and was one of the few providers. This is still the case today.
Threats are primarily robbery and theft, compounded by the problem of unwanted visitors such as door-to-door salesmen as well as invited visitors who then have access to unauthorized areas within a residential complex. Moreover, because labor is affordable in India, many families employ domestic helpers. Some of these workers live in the same apartment as the family, and there have been reported incidents of assault and other attacks on women, children and elderly persons who found themselves alone at home with these employees. Additionally, with the rise of the middle class in India, families increasingly go on holiday once or twice a year, something that was less common before. Thus, residences are left unprotected for days on end, providing another reason for the growth of residential security.
Furthermore, the preference for devices which offer ease of use and sleek design seen in the West and for security integrated with home automation, is also becoming more and more prominent in India. Until a few years back, a smart home was a luxury affordable only for the elite few, but today, advancement in low-cost technologies and greater awareness has made them accessible to much larger numbers. The nation will soon follow the trend seen in other Asian countries, whereby new housing facilities which provide security measures find new owners sooner than those which do not. Factors such as greater media coverage of various security solutions, higher disposable incomes, the reverse brain drain which brings back non-resident Indians/international professionals who have been exposed to similar products in other countries also fuel this market. Residential security equipment is estimated to one of the fastest growing product categories in India over the medium term.
As for IP technology, it only became a market force 18 months ago. The fairly recent telecommunications boom has gone a long way to support broadband services in residences, and as available bandwidth increases, this has in turn facilitated the use of IP technology for security and other applications. Security and home automation is preferred by customers living in all types of homes. Standalone burglar alarm system and video door phone is preferred by standalone bungalowstyle homes. Most apartment communities require networked security with video door phone and intercom facilities.
High-end luxury apartments go a step further and install networked home automation solutions along with basic security systems. An integrated township is today planned with integrated perimeter security with smart card-based access control solutions along with networked home automation solutions. In summary, every single home has the need for security, and solutions for the same are now not restricted to just the high net-worth homes. In addition, most customers prefer to go for branded and globally proven solutions as they are now available in the Indian market. Thus robust technology can be leveraged to meet dedicated needs of the specific community.
A Problem the World Over
¨As crime trends speed up and have become frankly atrocious in some regions, threat to life has risen, too,〃 said Keizo Kato, General Manager of the Alarm Monitoring Security Business Division at OPTEX. Need to be alerted about a threat before it intrudes into the house has increased. This applies especially to countries where there is great disparity in wealth (such as China, Africa, Latin America, and Russia) and number of migrant workers is high (such as Italy, Spain, the U.K., and France). Reliable systems that minimize false alarms and use outdoor cameras and outdoor sensors have increased in popularity.〃