By Kurt Scherf, Vice President, Principal Analyst, Parks Associates

1.0 Executive Summary

2.0 Introduction
   2.1 Basic Versus Advanced Controllers
   2.2 Market Forecast Considerations
   2.3 Methodology
      2.3.1 Advanced Controller Methodology
      2.3.2 Basic Controller Methodology
      2.4 Data Sources

3.0 Key Drivers and Inhibitors
   3.1 Key Drivers
      3.1.1 The Economy
      3.1.2 Emerging Technologies
         3.1.2.1 The Standards Race
         3.1.2.2 Better, Cheaper Chips
         3.1.2.3 Advancement of the Internet
         3.1.2.4 Integration of Home Systems
      3.1.3 Consumer Trends
         3.1.3.1 Demographic Trends
         3.1.3.2 SOHO Growth
         3.1.3.3 PC Penetration
         3.1.3.4 Popularity of Telecommunications Services
         3.1.3.5 Perception of Home Control/Security
      3.1.4 Interest of New Players
      3.1.5 Computer Companies
         3.1.5.1 Consumer Electronic Companies
         3.1.5.2 Telecommunications Companies
         3.1.5.3 Energy Utilities
         3.1.5.4 Cable Companies
         3.1.5.5 US Government
      3.1.6 Falling Prices
   3.2 Key Inhibitors
      3.2.1 Historical Builder Reluctance
      3.2.2 Standards Issues
      3.2.3 Lack of Consumer Awareness
      3.2.4 Limited Distribution Channels

4.0 U.S. Housing Market Characteristics and Forecasts
   4.1 Housing Unit Definitions
   4.2 Housing Prices
   4.3 Housing Classifications: New Starts Versus Existing Housing
   4.4 Key Housing Drivers and Inhibitors
      4.4.1 The Economy and Housing Markets
      4.4.2 Housing Market Drivers
         4.4.2.1 Changing Needs of Baby Boomers
         4.4.2.2 Aging Population
         4.4.2.3 Greater Propensity to Live Alone
         4.4.2.4 Immigration
         4.4.2.5 Access to Financing
         4.4.2.6 Aging Housing Stock
         4.4.2.7 Housing Changes to Reflect Lifestyles
         4.4.2.8 Increased Demand for Multi-family Housing
      4.4.3 Caveats
         4.4.3.1 Second Homes
         4.4.3.2 Regional Differences
   4.5 Housing Forecasts

5.0 Home Systems Forecasts
   5.1 Intelligent Communications Controller
   5.2 Energy Management
      5.2.1 Intelligent Heating, Ventilation, and Air-Conditioning Controllers
      5.2.2 Programmable Thermostats
   5.3 Entertainment Controllers
      5.3.1 Advanced Entertainment Controllers
      5.3.2 Universal Remote Controls
   5.4 Lighting Control
      5.4.1 Intelligent Lighting Controllers
      5.4.2 Basic Lighting and Appliance Control
   5.5 Advanced Home Controllers
   5.6 Security Systems
      5.6.1 Intelligent Security System Controllers
      5.6.2 Do-It-Yourself Security Systems

Figures in Section 1.0
Figure 1-1 Intelligent Controller Forecast
Figure 1-2 Mass-Market Controller Forecast
Figure 1-3 Total Revenue - Home Systems Controllers

Figures in Section 2.0
Figure 2-1 Advanced Controller Forecasts
Figure 2-2 Advanced Controllers in New Housing Starts by 2005
Figure 2-3 Advanced Controllers in Established Housing by 2005
Figure 2-4 Typical Basic Controller Configuration
Figure 2-5 Basic Controller Forecast Methodology
Figure 2-6 Data Sources

Figures in Section 3.0
Figure 3-1 In-Home Networks: A Timeline of Technology
Figure 3-2 Home Networking Development 1997-1999
Figure 3-3 Home Networking Development 2000-2001
Figure 3-4 Microprocessor Prices
Figure 3-5 The PC Household as a Driver
Figure 3-6 Likelihood of Networking
Figure 3-7 The Evolution of Networking?
Figure 3-8 Drivers for Home Control/Security
Figure 3-9 Cross-Industry Interest in Home Controls
Figure 3-10 MSOs Rolling Out Security Services
Figure 3-11 Average Price of Home Controllers
Figure 3-12 Distribution Paths for Home Control Products

Figures in Section 4.0
Figure 4-1 Average Price for a Single Family Home
Figure 4-2 Housing Starts since 1978
Figure 4-3 Drivers and Inhibitors to the Housing Market
Figure 4-4 New Homes with 2 or more Floors
Figure 4-5 New Homes with 4 or more Bedrooms
Figure 4-6 Desired Features of New Homes
Figure 4-7 Housing Starts
Figure 4-8 Single Family New Starts by Price, 2002
Figure 4-9 Single Family New Starts by Price, 2009
Figure 4-10 Housing Forecast
Figure 4-11 Single Family Housing by Price, 2002
Figure 4-12 Single Family Housing by Price, 2009

Figures in Section 5.0
Figure 5-1 Market Value for Intelligent Communication Controllers
Figure 5-2 Types of Sales of ICC
Figure 5-3 ICC System Penetration by Price Range of Home
Figure 5-4 ICC System Penetration in Existing Homes
Figure 5-5 ICC System Penetration in New Starts
Figure 5-6 ICC Penetration by New Home Price
Figure 5-7 Sales of ICC by Type of Housing
Figure 5-8 Annual Growth Rates of ICC Sales
Figure 5-9 Average Unit Price of ICC
Figure 5-10 IHVAC Revenue Forecast
Figure 5-11 Sales Of IHVAC
Figure 5-12 IHVAC Penetration by Price Range of Home
Figure 5-13 IHVAC Penetration of Existing Homes
Figure 5-14 IHVAC Penetration of New Homes
Figure 5-15 IHVAC Penetration by New Home Price
Figure 5-16 Sales of IHVAC
Figure 5-17 Growth Rates of IHVAC
Figure 5-18 Households with a Programmable Thermostat
Figure 5-19 Unit Sales of Programmable Thermostats
Figure 5-20 Programmable Thermostat Revenues
Figure 5-21 Sales of Programmable Thermostats
Figure 5-22 Penetration for Advanced Entertainment Controllers
Figure 5-23 AEC Revenue Forecast
Figure 5-24 AEC Penetration by Price Range of Home
Figure 5-25 Average Unit Price for AEC
Figure 5-26 Percent of AEC Sold to New and Existing Homes
Figure 5-27 AEC Penetration by New Home Price
Figure 5-28 Growth Rates of Sales of AEC
Figure 5-29 Households with Universal Remote Controllers
Figure 5-30 Projected Unit Sales of Universal Remote Controllers
Figure 5-31 Unit Sales of Universal Remote Controllers
Figure 5-32 Annual Revenues for Universal Remote Controllers
Figure 5-33 Forecast Price of "Cross-Category" URC
Figure 5-34 Market Value of Intelligent Lighting Controllers
Figure 5-35 Sales of Intelligent Lighting Controllers to New and Existing Homes
Figure 5-36 Penetration of ILC by Price Range of Home
Figure 5-37 Average Unit Price for Intelligent Lighting Controllers
Figure 5-38 Homes with Basic Lighting and Appliance Controllers
Figure 5-39 New and Replacement sales of BLAC
Figure 5-40 Market Value of BLAC
Figure 5-41 Market Value of Advanced Central Controllers
Figure 5-42 Penetration of ACHC in New Starts
Figure 5-43 Penetration of ACHC by Price Range of Home
Figure 5-44 Average Unit Price of ACHC
Figure 5-45 ISSC Penetration in New Starts by Price of Home
Figure 5-46 Unit Sales of Intelligent Security System Controllers
Figure 5-47 Market Value of Intelligent Security System Controllers
Figure 5-48 Percent of ISSC Sold to New and Existing Homes
Figure 5-49 ISSC Penetration in Existing Homes by Price Range
Figure 5-50 Intelligent Security System Controller Unit Price
Figure 5-51 Penetration Rates of Monitored Security by Home Price Range
Figure 5-52 Projected Monthly Monitoring Price
Figure 5-53 Penetration Rates of Security Systems
Figure 5-54 Projected Penetration of DIY Security Systems
Figure 5-55 DIY Security Controller Sales
Figure 5-56 DIY Security Controller Price
Figure 5-57 Market Value of DIY Security Controllers

© April 2002 Parks Associates
Dallas, Texas 75230

All rights reserved. No part of this book may be reproduced, in any form or by any means, without permission in writing from the publisher.

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