Top 5 Home Tech Opportunities for 2014

The Top 5 technologies to watch in 2014 include: high-resolution audio, mass-market home automation, Cloud video surveillance, more sensor opportunities, and automated door locks. By ChannelPro

The Top 5 technologies to watch in 2014 include: high-resolution audio, mass-market home automation, Cloud video surveillance, more sensor opportunities, and automated door locks.

1. High-Resolution Audio: Consumers Have "a Higher Appreciation for Great Audio"
The audio division of the Consumer Electronics Association counts high-resolution audio (HRA) as the top priority for 2014 - so much so that at the division's annual meeting last October, HRA was practically the only subject on the agenda.

"The audio board is going to devote our year to it," says division chairman Walt Zerbe of OnQ/Legrand.

High-resolution audio is a rather ill-defined term but basically refers to "anything above CD quality," according to Zerbe.

Much like CEA's Ultra HD moniker for 4K TVs, high-resolution audio (also a CEA-inspired term) does not come with specific technological requirements. Rather, it is a marketing term meant to rally the stakeholders, including consumers, around audio quality beyond compressed formats such as MP3.

Those stakeholders have aligned like never before, finally making HRA a real opportunity for 2014 and beyond.

"The hardware and software communities are aligning in maybe a once-in-a-generation opportunity," says iBiquity's Peter Brady, the outgoing chairman of CEA's Audio Division.

He counts the content providers, recording communities and hardware and software makers among the allied interests in HRA. Getting all of the parties on board has been a "chicken-and-egg" situation for many years but it "appears all of the sudden" they've come together.

Zerbe notes that a major obstacle in the past has been agreeing on a particular format for HRA, but "now we have chipsets that decode everything."

On the content side, HRA has been bolstered through a collaboration between download service HDTracks and Universal Music, Sony Music Entertainment and Warner Music Group, as well as hundreds of other labels and distributors. Late in 2013, HDTracks began worldwide operations, launching a new, more consumer-friendly site featuring more than 10,000 albums - including a large chunk of Rolling Stone's "500 Greatest Albums of All Time" - available in 24/96 and 24/192 bit/sampling rates.

The company says that business has more than doubled every year since HDTracks debuted in 2007, "a success that mirrors the explosive, double-digit growth of high-resolution digital downloads overall."

Contrary to the popular belief that the younger generation cares more about convenience than quality, Zerbe says that higher-performance headphones have given these consumers a "higher appreciation for great audio."

CEA research finds 39 percent of consumers with a moderate interest in audio indicate they are willing to pay more for high-quality audio electronics. Nine in 10 say sound quality is the most important component of a quality audio experience. Other factors identified include compelling content (85 percent) and superior audio electronics (72 percent) as vital to consumer enjoyment of audio.

Consumer electronics are making it simpler than ever before to acquire and listen to HRA content. Previously, the audio ecosystem required a computer, DAC and an array of software, but now it "won't require an engineering degree to download," says Mark Waldrep of the HRA download service iTrax. For example, Sony introduced two high-resolution audio players in September 2013 that handle everything from music downloads to storage to decoding.

"When you buy downloads, it automatically pushes it to the machine," says Jayson Savage, technical specialist for custom audio and video at Sony. "You don't have to pull another wire. You don't have to worry about firing up your NAS (drive). You don't need to worry about the network."
Retailers Rejoice at HRA
"High-resolution audio is experiential," says Waldrep. "You cannot hear it by reading about it in a chat room. It needs to be more than one company putting an end cap in one retail store."

That's the good news for specialty A/V shops.

"I'm enthusiastic about it," says Bjorn Dybdahl of Bjorn's in San Antonio, Texas. "We as specialists have an advantage, but they [HRA product and service providers] are going to have to give us help."

An additional HRA opportunity rests in clients' existing music collections. Sony, for one, offers Direct Stream Digital (DSD) technology for enhancing music quality. The flagship model of Sony's new HRA lineup, the HAP-Z1ES Hi-Res hard-drive Music Player, for example, features "DSD Re-mastering engine to convert and enhance virtually any music files to DSD (5.6M) quality," the company says.

"We are most excited about what DSD can and will do to compressed files that already exist in the customer's library," says David Berman of Stereo East in Frisco, Texas.

2. Mass-Market Home Control: Consumer Awareness, Single-purpose Devices Fueling Automation Market
2013 may very well be remembered as the year of mass-market home automation. It was the year that most of the cable companies joined Comcast/Xfinity in the security and home-control business. Telecommunications giant AT&T joined the fray. Even DirecTV acquired LifeShield, which makes a self-installed, professionally monitored security system.

On the retail DIY side, Lowe's launched its Iris home control system and Staples rolled out Connect, the first DIY automation system with native ClearConnect wireless technology for integration with Lutron lighting controls and motorized shades. Best Buy committed to an integrated car/home automation system from Viper. Amazon launched an online Home Automation Store.

Meanwhile, ADT continues to rake in revenue with its Pulse home monitoring and management system. In its fiscal fourth quarter ended September 30, 2013, the company reported take rates of 32 percent for Pulse, up from 13 percent in the same period one year earlier.

All of these major players, plus others like Alarm.com, have poured millions of dollars into consumer advertising for a category that previously had seen little or no air time.

Home automation seems to be showing up everywhere these days, even the likes of Amazon, which recently opened a "Home Automation Store" to sell products and educate browsers.

"I've never seen more advertisements," said Scott Harkins, president of Honeywell Security Products, during a 2013 conference of top Honeywell dealers. "The 'connected home' suddenly has become cool."

Traditionally, home systems professionals have been challenged by the obscurity of home control. How do you get your foot in the door if no one understands what integrated systems can do? In 2013, however, 26 percent of integrators indicated the era of mass-market automation has made it much easier or somewhat easier to sell their services. Only 18 percent in the CE Pro survey said mass marketers have made it more difficult to sell home control.

Internet of Things & Single-Purpose Devices
While whole-house integration is becoming more prevalent, the big home-automation drivers for 2014 and beyond are likely to be in single-purpose devices widely available to DIYers. These include thermostats (like Nest), smart light bulbs (Philips Hue), electronic door locks and ever-smarter surveillance cameras.

Grabbing the attention of many consumers, products like these are sneaking into the home and, later, being added to home-control systems when the manufacturers open up the protocols (for example, in the case of Control4 and Nest).

Many of these products are enabled with built-in Wi-Fi, or the so-called Internet of Things, which allows remote access from smart devices without the need (usually) for a separate gateway device. Traditional home-control manufacturers are starting to support these new devices because they have caught the attention of consumers.

Dealers and their DIY Installs
Several new app-centric home control systems have popped up in recent years. While the inexpensive solutions ($10 and up for software; $100 and up for IP enablers from the likes of Global Cache and Bitwise) can be purchased by consumers, pros are finding profits in the products. Integrator and CEDIA board member Gordon Van Zuiden of Cybermanor in Los Gatos, Calif., for example, uses Roomie Remote for his home-automation customers.
Matt Collazo of Chase Systems in Bethesda, Md., uses iRule for jobs that average about $5,000 but often reach into the six figures.

"I've seen situations where a customer is not happy with their dealers and then they're sort of locked in because that dealer created the monster," Collazo says. "To me, that's not a fair situation."

Collazo charges little or no markup on the hardware and software, making money instead on services including installation, interface design and network configuration. Charges are predictable, he says.

iRule isn't the only DIY device in Collazo's arsenal. If a customer just wants one or two lights in a system in which a full-featured lighting control system is overkill, "I just grab a couple Belkin Wemos from the truck and charge them for my time."

And while Belkin's IoT-enabled Wemo devices are not "open protocol" per se, "If you have a customer with Belkin pieces, just reserve that MAC address in the router" for control, according to Collazo.

He says customers appreciate that they can make modest system changes themselves, even if they usually don't: "Most people might say it's bad for business, but the reality is that people who hire custom installers aren't really interested in doing that kind of thing."

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