After announcing that its home automation and security services have hit the 1 million customer milestone, Comcast has become a major competitor to ADT in the so-called professional security intruder alarms market, says research company IHS.
“In recent years, the multi-service operator (MSO) market has grown to pose an increased challenge to traditional security providers, and the latest Comcast press release including the number of subscribers confirms just how serious the challenge is,” said IHS Technology analyst Anna Sliwon in a report on the home security market.
IHS predicts that the traditional landline-based home alarm market will shrink at a 4% compound annual rate between 2016 and 2020. But the IP-connected monitoring market controlled by Comcast will expand at a 15.9% compound annual growth rate (CAGR) over the same span.
“In essence, Comcast demonstrated success in taking advantage of its wide array of services while taking into account customers’ needs by releasing an inexpensive, innovative package and constantly improving its products quality and reliability, with R&D investment reported at $1.8 billion,” Sliwon said.
Comcast, she added, has been able to achieve subscriber growth of 90.4% CAGR since 2010, the year its Xfinity Home service was introduced.
“Moreover, the latest merger with IControl is likely to open up additional opportunities for growth,” Sliwon added. “This may bring additional challenges to professional security equipment manufacturers and service providers (such as ADT), particularly if IControl’s Converge platform and Comcast’s Xfinity products begin to be offered through sales channels normally reserved for the professional security market: dealers.”
The analyst pointed out that ADT has also been successful in converting its traditional customer base to smart connected home. ADT is up to 2 million customers—but Comcast has an advantage in that its able to convert across its 22-million customer footprint.
“If Comcast and ADT continue to convert their subscriber base to smart security at a similar rate with which they achieved their 2017 milestones, by 2025 ADT will reach a nearly 100 percent conversion of its existing residential subscribers, requiring it to devise a new strategy of increasing the total number of subscribers,” Sliwon said. “Its current total number of subscribers is estimated at nearly 7 million, most of which are residential customers
“Conversely, Comcast currently has more than 22 million subscribers, and by 2025 its conversion rate will be much lower, at less than 20 percent of ADT’s, which will present a greater opportunity because Comcast will not have to rely as heavily on a greenfield customer base,” she added.
