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From Elite to Essential

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In India, home automation was a mere concept and was considered only by the rich and elite until about a decade ago. However, what was once considered fancy is now becoming an essential solution for new homes. With growing awareness about improving lifestyles, reducing prices of these systems, and energy saving measures, home automation solutions are becoming an integral part of new homes. This solution represents the next level of automation combining technology and imagination according to Environment & Building Technologies Practice, Frost & Sullivan.

Home automation is a subset of building automation and is at the core for smart homes. Home automation solutions connect, monitor, and control all the stand-alone systems such as lighting, heating ventilation and air conditioning (HVAC), window blinds, audio-video (AV) systems, safety, and security systems on a single platform. All these systems are integrated onto a common platform with the help of a hardware and software combination and are often controlled with the help of a smart phone or a tablet computer. Comfort and convenience are the major drivers responsible for the adoption of these solutions.

Potential in India

With the boom in the real estate sector, many developers are opting to add the home automation element to their new properties as a point of differentiation from their competitors. Many luxury projects are being planned around Delhi-NCR, Punjab, Chandigarh, Amritsar, Bangalore, and Ahmedabad that are expected to drive the demand for home automation solutions. However, once associated with high-end commercial and residential projects, home automation solutions are increasingly penetrating mid-sized apartments and independent homes also. This increasing demand will bring tremendous opportunities for product suppliers, systems integrators, contractors, and developers.

Competition in this market is concentrated between international brands and a few local well established Indian companies. Companies like ABB, Honeywell, Schneider Electric, Legrand, Lutron, Crestron, and Siemens have a strong product portfolio and have their in-house engineering and systems integration teams. Companies like Advantech, Smart Automation Technologies (P) Ltd., Acetech Technologies, and Surmount Energy Solutions Pvt. Ltd. have a strong systems integration experience and closely work with product suppliers to deliver a holistic integrated solution to the end user. Also, there is a growing influx of Chinese product imports by distributors and systems integrators in order to be cost competitive and make a lucrative offer to the end users.

Increasing Affordability

Home automation solutions have witnessed a drastic reduction in prices, mostly because of the improvement in technology. Service providers are also working towards reducing the cost of these solutions so that they can be made affordable to the middle class. The cost varies as per the requirements of the customer; however a basic solution for a 1,000sqft residence starts from about INR 1.0 lakh and can move up to about INR 15 lakhs for a fully integrated high-end solution. With the increasing prices of electricity in India and the reducing costs of these systems, the initial costs can be recovered in a period of about two to three years due to reduced power consumption. This is further expected to drive the demand for these solutions.

Market Drivers:

• Technology improvements

Increasing penetration of

smart devices

• Economic benefits

• Energy efficiency

Limitations:

• High initial cost

• Low awareness

• Perception and mindset

The smart home concept in India is at a nascent stage and is witnessed only in pockets in metro cities of Delhi, Mumbai, Bangalore, Chandigarh and Hyderabad. As per Frost & Sullivan analysis, the industry is expected to grow at a rate of about 20-25 percent each year for the next five years.

Value Chain Participation

Important Entities

• Product Suppliers: Companies which have a strong R&D and engineering focus develop products and software. They often have in-house engineering and systems designing and integration teams to assist various third party systems integrators and end users.

• Consultants: They are usually the influencing authority and play a crucial role in designing the system and deciding the brands to use. Consultants are usually used in high end luxury projects as the complexity of solution increases. In most of the cases, the developers along with the electrical consultants and systems integrators design the solution.

• System Integrators/Contractors: As the home automation industry is technology and solution driven, system integrators play a crucial role in delivering the solutions to meet the end users expectations, and majority of the responsibility lies with the systems integrators. System integrators usually act a contact point for end users, product suppliers, and consultants.

Mega Trends Shaping the Future

• Smart City: Demand for integrated and smart infrastructure in terms of buildings, transport, energy, and healthcare is expected to rise. Futuristic development will focus on designing and development of systems and technologies with zero carbon emissions, zero wastes, and zero errors. This will drive the demand for building automation and home automation markets.

• Energy: India will shift its focus from the traditional base-load plants to a demand and supply approach, which is designed to help balance the fluctuating power requirements. This will also be supported by various Government driven initiatives to curb/efficiently manage energy usage.

The home automation market has witnessed a lot of momentum during the last five years. Many companies have seen that the increasing demand and new products and solutions introduced have also fine-tuned their existing offerings. Competition is likely to intensify as demand increases and prices continue to fall. New product development especially in the mid-range, rising end-user demand and an increasing influx of housing projects will drive demand for home automation. With advancement in technology and improving purchasing power, home automation solutions will become a necessity in the near future.

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