Google, Netgear, and more are shaking up home security market (GOOG, NTGR)

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The connected home security market has been one of the most active segments of the consumer IoT, with companies like Nest and Wink releasing new products in a bid to expand their presence in the home, as detailed in our recentIoT 2018 report.

Now, a number of companies are moving to change the way they’re engaging with the home security space, as they look to match competitors and diversify revenue away from hardware alone.

Netgear will spin out its Arlo home security camera unit into a separate company, reports
reporting
Home security company SimpliSafe announced a refresh to its product line, according to
Alphabet-owned Nest will be integrated into the Google hardware unit, the company

Consumers are choosing to install home security products in increasing numbers.Forty-four percent of US-based respondents to a Coldwell Banker survey said they have some sort of smart home security device installed already, and another 12% plan to buy and set up a security device or system in 2018. The market for these sorts of devices is growing, which is why the likes of Nest, Wink, and SimpliSafe are expanding on their product offerings, looking to capture a larger swath of the market.

What most of these smart home security companies are also doing, though, is ensuring they offer AI-based services to build ongoing revenue streams. Most major players in the smart home security space already offer this, including Nest, Arlo, SimpliSafe, and Canary — though the latter had some issues in attempting to move features from its free tier of service into the premium tier. Smart security devices are generally meant to last for a number of years, meaning a company like Arlo’s long-term growth in the consumer space depends largely on the growth of the market for smart home devices. Using AI to make security systems better will allow companies to convince more consumers to pay for their premium tier and create a sustainable business model that doesn’t rely so much on device sales.

The US smart home market has still yet to meet the expectations many observers had in the early part of this decade.

The same issues BI Intelligence first identified back in 2015 still plague the space — persistently high prices, technological fragmentation, and consumers' lack of a perceived benefit from the devices.

But the newfound popularity of smart home voice control has revolutionized smart home ecosystems across the country, and convinces more consumers to equip their homes with smart devices on a daily basis. The Amazon Echo, released in 2014, has become immensely popular and capable, awakening users to the utility of both voice control and smart home devices. This has prompted companies to rush to release competing devices and integrate voice control into their smart home ecosystems.

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