December 29, 2013

Consumers getting smart with high-tech homes

Automation is becoming more sophisticated – and more affordable – thanks to smartphones and Wi-Fi.

By Andrew Khouri and Andrea Chang
Los Angeles Times

For Raffi Kajberouni, the keys to his Santa Clarita, Calif., home have become relics.

If he locks himself out, no problem. If a friend arrives at his two-story house before him, there’s no waiting outside for Kajberouni to arrive. Kajberouni taps his smartphone and his front door unlocks.

He can also turn down the thermostat or view his home security cameras from anywhere in the world.

“A lot of my friends are jealous,” the 31-year-old said. “It’s like the home from ‘Back to the Future,’ but in real life.”

From complete home systems to individual Internet-connected products such as high-tech appliances and power strips, the smart home is no longer a futuristic gimmick.

The technology behind smart gadgets – items that can be controlled remotely or perform tasks on their own – has been around for decades, but until recently the devices were rudimentary and, above all, expensive.

“It had always been an upscale-type business: Unless you were in the top 5 percent of income levels, you didn’t have access to this type of connectivity,” said Randy Light, merchant of home automation for Home Depot.

Wireless Internet and the widespread proliferation of smartphones are making smart home technologies more sophisticated – and affordable.

“This used to be something out of ‘The Jetsons’ or limited to the super-rich,” said Jonathan Dorsheimer, an analyst at Canaccord Genuity. But as smart home technology has improved and costs have come down, “it’s becoming more mainstream.”

Analysts estimate that only a small single-digit percentage of homeowners have smart homes.

But the home automation systems and services market is expected to see enormous growth in the coming years and is forecast to reach $14.7 billion in revenue globally by 2017, up from $3.6 billion last year, according to NextMarket Insights.

These days, a wide swath of companies is clamoring to sell smart systems, including home security firms, telecommunications giants such as AT&T and Verizon, cable providers and utilities.

That’s expected to help “propel the market from its fairly modest size today to one which serves more than 35 million households by 2017,” NextMarket said in its recent report.

Meanwhile, technology giants such as Samsung and LG are rolling out individual smart home products, part of the “Internet of things” trend that has seen Internet connectivity make its way into everyday items.

The housing recovery could also fuel growth if owners choose to pull out their rising equity to give their homes high-tech upgrades.

And as Americans purchase more newly built homes, they may increasingly find those digs fully integrated with their phones. Some of the nation’s largest home builders now market tech-equipped houses’ advantages over older homes.

Although new homes are usually more expensive, builders have emphasized the long-term cost savings owners can reap through solar panels and the ability to monitor and change their energy usage with smart devices.

That’s because computerized controls in one’s home and on appliances can be set to respond to signals from energy providers to minimize electricity consumption at times when the power grid is under stress from high demand. Homeowners can even shift some of their power use to times when electricity is available at a lower cost. The so-called smart grid – a digital network enabling utilities, consumers and alternative sources of renewable energy to “talk” to one another instantaneously – steers electricity to where it is needed most.

Russell Chang and his wife recently purchased a four-bedroom house in Irvine, Calif., complete with solar panels and several home automation offerings from Miami-based Lennar Corp. Since they purchased the house in November for a little more than $1 million, he has enjoyed ensuring the house is warm before he steps inside.

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