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Wednesday, October 26, 2016

By Frank Witsil, Detroit Free Press

In a 3,200-square-foot home in Milford, Michigan, Chris Dierkes showed off one of AT&T’s latest service offerings: home security and automation.

Dierkes demonstrated how to turn down the thermostat using an application on his iPad.

“The temperature is set to 72 degrees,” the AT&T sales manager said last week as he slid his finger across the tablet screen. “If you want to dip this down to 70, you can.”

In an effort to find new revenue streams, AT&T, Comcast and other companies are taking on established home security companies such as ADT, which dominates the $13 billion home security market. The players new to the security business are hoping to leverage their data networks and existing customer relationships.

Moreover, in addition to home security, they are selling services that just a few years ago were too expensive for many people to afford, including the ability to remotely lock and unlock doors, see what’s going on through surveillance cameras, and even shut off the water.

Wireless technology — and increased competition — has dramatically lowered the cost of installing equipment and allowed homeowners to integrate more automation features, said Chris Heaton, the vice president of membership for the Texas-based Electronic Security Association.

“The market for this has taken off,” he added.

Heaton said he expects the new competition to continue to increase and the number of homeowners nationally who have home security systems to grow from 20 percent to 30 percent or more in the next decade.

AT&T charges an installation fee for its Digital Life system, and then a monthly charge starting at about $30 depending on the services.

“The network allows us to overlay more products and services and take the handheld devices and create new uses for them,” said Greg Clark, an AT&T regional vice president of external affairs.

At the same time, the slick marketing that the national providers trying to get into this business is benefiting independent home security firms.

“The industry is creating an awareness,” said Ron Ross, president of Vigilante Security in Troy, Mich., who estimated the demand has boosted his company’s sales by 20 to 25 percent. “The consumer is doing their shopping as a result.”

Comcast, based in Philadelphia, offers security and automation service through its Xfinity brand. The company said it is a new revenue stream — and a service customers are demanding.

“It’s about getting more value out of the technology,” said Michelle Gilbert, Comcast’s vice president of public relations. “We are integrating all of your technology together so no matter where you are, you are in control.”

How much business they will take from companies like ADT, which estimates it has about a 25 percent market share of the security industry — and whether other wireless phone providers like Verizon will start offering home security service — is unclear.

Tony Wells, chief marketing officer of ADT, said the Boca Raton, Florida-based company has been offering home security much longer — about 140 years. It also offers home automation services, but considers its focus on home security, as opposed to being an add-on service, to be a competitive advantage.

“We view security not just about the home, but about your personal security — and digital security,” Wells said. “We believe it’s core and central. It’s the only thing we do.”

AFP Photo/Timothy Clary

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  • Ann-Marie Poli

    Having laughed and composed myself over the decisions for their companies futures, I will explain by my own experience. Having been burglarized I searched for an affordable home security system. My neighbor called ADP. It is true that wireless technology has made things more affordable, but not for lack of ADPs efforts to rake it in. I purchased the exact same items to secure my house for $400 with a $15/mnth(optional) monitoring fee as my neighbor for $1500 plus $54/mnth. I purchased online from a company who explained that they did not have the overhead ADP has leftover from their days when it was not wireless technology. There is no need to send a salesperson or installers to the house. Wireless technology is peel and stick. You peel the backing off that diddy and stick it to whatever window or door you wish to secure. As for the monitoring, no company is directly connected to the authorities, so there should be no significant difference in charges there. The online company I chose also allowed me the option to install the alarm, which is often enough of a deterrent, without being obligated to a monthly monitoring fee. This allows people who cannot afford that monthly fee the ability to do something to secure their home. Police told me burglars will shine flashlight at the window looking for that device and leave. Yes, Comcast and ADP execs, you are correct about the wireless technology making home security more affordable, and times making it more desirable, but you fail to take into account your own relevancy in that market while driving your future toward it.