slychiu
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Market Overview from the Frost and Sullivan Report 30 July 2007
Retrofit Applications Hold Unlimited Potential for the European Home Automation Market
Characterised by rapid expansion and high technical innovation, the European market for home automation systems is a dynamic one. There are a large number of market participants with diverse size, origin and core-competence. Despite the market growing at a brisk 9.1 per cent per annum, there are significant opportunities for robust, long term growth. Currently, there is strong emphasis on product differentiation strategies, the adoption of different communication protocols (particularly wireless technology) and the development of sales and distribution channels.
"The European home automation market is being driven primarily by the construction of new homes," notes the analyst of this research service. "While major renovations are also contributing to market growth, the retrofit market is yet to be exploited effectively."
Market Participants to Focus on Overcoming Challenges Including the High Cost of Installation
"One of the major challenges manufacturers and suppliers face in the home automation market is in accessing Europe’s existing housing stock, estimated at 155 million houses," explains the analyst. "At present, only one-fifth of new systems are installed in existing houses and the remaining four-fifths are installed in new homes during construction." There are several reasons that are attributed to this situation. Firstly, in the context of sales and marketing, it is easier as well as more rewarding to target property developers since they purchase numerous systems and can be easily identified and focused upon. Secondly, the construction period is an ideal time to install infrastructure such as home automation systems, without disruption to occupiers. This also facilitates easy access to required areas, particularly if wires are to be laid out. Lastly, the significant cost of a home automation system is more easily budgeted and financed, when bundled with the cost of a house purchased. Having mentioned these factors, it is expected that the situation will change, with companies continuing to offer the necessary innovative solutions to break down these barriers.
In addition to overall market trends, understanding regional trends is also of great importance. In the European home automation market, both the relative market size and the dominating participants vary greatly. For instance, despite France being one of the leading economies in Europe with a large population and also one of the largest housing stocks, its home automation market is several times smaller than the similarly sized United Kingdom and Germany. However, overall, the European market is poised for growth and continued technological innovation is expected to assist in overcoming the challenges currently faced by participants.
Last edited on Thursday Aug 16th, 2007 02:31 pm by slychiu
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