House invader

Home automation has long been held up as a major opportunity for electrical contractors, yet the smart house remains a concept in all but a few cases. The irony is that in the meantime our homes really are getting smarter. We can order films by remote control, much of the population has access via pcs to an information source vaster than a billion Encyclopaedia Britannica and a subgroup find this so useful that they are signing up to receive information ten times faster. The concern for the electrical industry is that a sitting duck market is being dominated by specialist new arrivals.

So what news from the world's most advanced home automation market, America? High-tech US research firm In-Stat recently produced a report predicting that the global 'connected home' market (which includes home control and automation) will grow from US$1.4 billion in 2001 to US$9.2 billion by 2006. It describes home networking as one of the few technology bright spots.

According to its report, several factors are driving the market, such as consumer recognition of the need for network security; the release of Windows XP; the predicted emergence of the home server; and interest in home networks among broadband service providers. "After years of asking questions and learning about connectivity, consumers have begun to see the value of networking a home," says Michael Wolf, In-Stat's director of LAN and enterprise services.

While current starter kits in the US are relatively inexpensive, the complexity of the interface and the sophistication of the programming language are limiting this market to the technology enthusiast at present. The penetration of Internet access and the emergence of home networks remain predominantly opportunities for service providers, utility companies, security installers, home builders and white good appliance manufacturers.

However, smart home networks, which use a range of technologies and standards from basic X-10 power line networks to fully automated proprietary and wireless systems, are creating new business models for the mass market. Yet with no widespread acceptance of common standards, last year many smart home specialists were acquired or went bust.

Furthermore, while it is relatively inexpensive to build intelligence into devices at the point of manufacture, retrofitting intelligence remains expensive. The primary business opportunity for service providers appears to be in bundling home automation with homeowner services. While the ability to automate homes is unlikely to be compelling to most consumers from a standalone perspective, In-Stat believes that they could be interested in combined services that have a clear use.

Big manufacturers and brands are getting in on the act. Microsoft has just launched a new Bluetooth keyboard-mouse combination. The package costs about £100, although technology analysts claim that the company is playing catch-up with Apple, which already offers Bluetooth in Mac OS X.

Bluetooth lets computers connect to peripherals, mobile phones and other portable devices without the use of cables. It differs from 802·11b, or 'Wi-Fi', which is a wireless technology for linking pcs into a network. Market researcher IDC expects Bluetooth adoption to take off in 2003, with the market for components reaching US$2.6 billion in 2006. The market was $76.6 million last year.

Echelon Corporation, of LonWorks fame, launched a new transceiver at the LonWorld 2002 exhibition in October that sends both power and control data over low cost, twisted-pair wiring. By distributing power from a central supply over the same cables that are used for network signalling, the LPT-11 eliminates the need for expensive local power supplies at sensors, actuators, light ballasts and displays. Home automation is one of the sectors it is targeting and its features will allow device manufacturers to minimise the size of their products and keep down the cost the overall wiring.

"Our design goals were to allow Echelon's home automation customers to build smaller, lower cost devices that are less expensive to install and maintain," says Mathew Chacko, Echelon's transceiver product marketing manager. "The use of link power technology should typically result in overall system savings of greater than 20% including equipment and installation. These savings can make the difference between winning and losing a project." The LPT-11 will be available in volume in early 2003.

"While the growth in smart home networks is not up to par with what was believed in 2000, there is still room for growth, especially with the involvement of industrial automation vendors such as Echelon and GE," says Jaclynn Bumback, an analyst with In-Stat. "Further, ZigBee, a new low power, wireless technology, could enable smart home networks wirelessly at low consumer price points.

"While this market is positioning itself for rapid growth, there are a number of hurdles which need to be overcome by the entire industry. Pricing and interoperability must be resolved for the smart home networks to gain mass market acceptance."