Report: Big revenue potentials in home automation for telcos

Pay-TV isn't the only service telcos are looking to add to their offerings. Increasingly, home automation is moving to the forefront as a business opportunity. Some 1.8 million home automation systems were shipped globally in 2011, ABI Research reports, but that number pales in comparison to the 12 million it expects to ship by 2016 as more telcos enter the segment.

Verizon (NYSE: VZ) is one of the newest entries to the market, recently announcing a $9.99-per-month product based on technology from Motorola Mobility (through its 4Home acquisition).

Verizon says its basic version enables remote monitoring and control of cameras, Z-Wave lights and door locks. Verizon also offers energy management applications like automatic thermostats, special Wi-Fi adapters that control appliances and lights and a sensor placed on the circuit box to measure whole-house energy use, as an add-on option.

Verizon is not alone.

Canadian provider Rogers Wireless has offered a system since November, and Orange (France Telecom), offers home monitoring services through its Livebox gateway-enabled broadband service. Telecom Italia and Telestra also offer their own version of home monitoring services.

But, said ABI M2M connectivity practice director Sam Lucero, there are significant hurdles to large-scale deployments.

"Telco and cable operators now have to develop and deploy software management platforms to specifically enable the management of home monitoring services," he said. "This challenge has resulted in a swift consolidation within the small market that is privately-held home monitoring software platform vendors, with 4Home being acquired by Motorola Mobility, iControl and uControl merging and Xanboo being acquired by AT&T."

And, telcos aren't alone in seeing the potential in home automation.

Last month, for example, UBS analyst Maynard Um said Apple (Nasdaq: AAPL) likely would launch its own home automation platform that could tie into iPhones and iPads and potentially double the company's market cap to $100 billion.

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