The Great Home Control Collision of 2009

4Home is trying to make home control into a service offering for carriers; its 4Home Energy product won accolades at CES2009. And companies like Actiontec are offering inexpensive home gateways (Actiontec’s zControl system for example) that offer up standard home networking along with Web-configurable and controllable home automation at a sub-$400 price point. This isn’t the end-all and be-all of home control, but it’s cheap and DIY-able. I see all of the major home networking vendors following along into this space in the near term – including the Ciscos of the world (who are already invested pretty heavily in things like set top boxes, home networking gear and IP cameras).

Consumers are getting sick of all the “stuff” and how none of it works together well. To complicate things, we’re up to at least a six-screen experience now – TV, PC, mobile, touchscreen, gaming platform, and automobile. And that’s growing. At a certain point, it’s just too much. Everyone is seeing this gadget fatigue, the question is who is going to win over the consumers with a sensible offering.

We usually handicap the CE vendors here, because they can move so fast. They are great migrational players…adding a few more devices to the product line here and there. Cisco’s making the big push here, but is being rather slow about it. The question is whether the CE vendors can move faster than the market needs for whole home integration.

But, in many ways, it’s all this consumer gear that is causing the problems whole home players are seeking to resolve. How do you make it all work well together? Do you throw in the towel and just go with a service provider solution, that is less functional but at least works? Or do you integrate it together and get the functionality at higher cost? Consumers want both high functionality at low cost and no one’s there yet.

You can only do so much without having someone install stuff; the DIYers and self-installs will remain in the low percentage points of the market – to succeed you are going to need someone on-site. There’s a LOT of nuance in installing home control, and carriers fail at nuance. In this vein, the Best Buys of the world are the best positioned with the consumer-friendly model and faster training and expansion. The telcos and cablecos, burdened by unions and slow product deployment paths, will take years to keep up with a fast-moving Geek Squad. These Geek Squad-style players need more compelling entry level products to make this more mass market, though, and ones that bring with them the content and transmission options.

To keep up, the telcos are going to have to partner their way into this, or stand to create competitors by inaction. Baby steps in home control, as we’re seeing from the telcos now, are not enough. This is the year that we’ll see the scarce home control players really commit to partners. What we’d really like to see is FiOS and U-verse hooking up with a major home control player to offer a sensible combination of the best of both worlds.