Custom Installers' Business to Bring in $20 Billion by 2012

Parks Associates and EH Publishing stated on Thursday that U.S. revenues generated through the custom integration and installation industry are projected to grow between eight and nine percent between 2007 and 2008, with total industry revenues hitting $9.8 billion in 2007 and growing to surpass $11 billion in 2008, as technology advancements permit more retrofit projects and sales by existing dealers grow.

Historically, dealers have split their business 50-50 between new construction and remodeling and retrofitting existing homes. However, this pattern is expected to change for two reasons: technological advancements, such as wireless systems and power lining, make retrofit projects more feasible to a broader market; and, there is a high probability that new owners of homes will upgrade their entertainment, security, and other home systems. On average, 1.5 to 2 million new homes are built annually in the U.S., with six to seven million existing homes changing ownership each year.

Many new owners of pre-existing homes acquire their new residence with the intent to renovate or retrofit it.

The power line retrofit method uses the existing power wiring in one's home for new networking. The advantages with this method are that no new cables required, every power socket can be a networking socket, and multiple sockets probably exist in every room.

Similarly, there is a "coax cable" method for retrofitting, which utilizes the existing television cabling in one's house to create new networking. The advantages here are that it requires no new wires and every television socket in the home can be used for networking.

The "phone line" method makes use of the existing phone wiring in one's house to create the new networking system. Again, no new wires are needed. Every phone socket in the house can be utilized for networking.

Increasingly, home technology systems are being networked with Wireless LAN (WiFi), which makes use of radio frequencies for networking. There are usually no new cables required to install it, but WiFi sometimes has a limited range, especially in larger homes with particularly thick walls. A WiFi-enabled device can be wirelessly connected to the home's main network by way of a receiver that just plugs right into the nearest mains socket. A modem can be hooked up to any cable or phone jack in one's house, thus providing lots of options for placement.

"Overall the home building industry has softened this year, but the market served by custom installers remains solid. Manufacturers see the opportunity for retrofit jobs through powerline- and wirelessly-enabled nodes, increasing the number of solutions aimed at this segment of the market in 2007," said Bill Ablondi, Parks Associates' director of home systems research.

"The overwhelming majority of installing dealers expect their total revenues to grow next year, but at a median growth rate of about 8% -- significantly less than the 14% growth rate that dealers reported as the norm for the past three years. Although this growth has slowed some, the opportunities are increasing and will continue to increase substantially as a result of these advancements in technology," added Daryl Delano, EH Publishing's research director.

Source:
Parks Associates (PR Newswire), "Home Systems Installation Revenues to Approach $20 Billion by 2012"