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Smart home systems: Tech boom raises the roof

Smartphones, laptops and tablets have opened the door to rising demand for smart home systems.

Smartphones, laptops and tablets have opened the door to rising demand for smart home systems.

It wasn’t long ago that if you were doing business with ADT or Vivint, it meant that you were in the market solely for property protection. But the rise of the smartphone has changed that, with the powerhouse players in security now tapping into one of the hottest new consumer trends: fully automated smart home systems.

Other companies not previously invested in whole-home solutions are diving in as well, including telecom giant Comcast. The good news for all of the competitors is that the market’s decidedly upward trajectory shows no signs of leveling off any time soon.

According to a new study by Berg Insight, a research company based in Gothenburg, Sweden, 36 million homes in North America and Europe will be "smart" by 2017, up from about 5 million at the end of 2012. In North America, Berg forecasts a compound annual growth rate of 55 percent during the next four years.

"Traditional whole-home solution vendors such as Creston, Control4, Gira and Jung are facing new competition as telecom operators, security service providers, energy companies and other vendors are entering the industry," Berg said in the report, "Smart Homes and Home Automation." "This is leading to a rapid increase in consumer awareness which is benefiting all players."

Berg defines a smart home system as one that has a smartphone app or Web portal as a user interface. Home devices that are controlled solely by switches, sensors, timers or remote control are not included in the study.

Smart home systems are divided into six primary categories: energy management and climate control; security and access control; lighting and window control; home appliances; audio-visual and entertainment; and health care and assisted living. As technology has advanced, so has the ability of manufacturers and vendors to bring them all together.

"Smart home solutions consist of a wide range of hardware and software technologies," the Berg report said. "As a result, a complex ecosystem is emerging, comprising whole-home solution vendors, product OEMs (original equipment manufacturers) and smart-home platform vendors."

Berg said the new ecosystem is giving rise to more competition as the lines become blurred between traditional market segments.