INSTEON Has 40% Market Share says West

[TonyNo]

Heh. Samsung has been amazing for a little while now!

 

[AutomatedOutlet]

George,

So, are you saying that Insteon has 40% of the wireless control market??

 

[Jim Doolittle]

Interesting discussion. Doubt market share reports will affect my decision. I will go with a balance between cost, reliability, ease-of-use, and functionality. Course those items should lead to more market share but look at what happened all those years ago with VHS versus Beta .

BTW, I assume that when markthomas' commented that technologies that depend on the powerline for communication can't be considered wireless did not mean that they cannot be plugged in to get power. Otherwise, I get I do not have any wireless devices around the house .

 

[WayneW]

We forecast both units and revenues. In this case the chip ASPs are close enough that it doesn't make much of a difference.

Does ASP = 'Average Selling Price'? From your comment, is it safe to extrapolate this statement: "The required proprietary hardware chip and licensing cost for Insteon, Z-wave and UPB are close enough that it doesn't make a difference in their retail pricing"? I am jsut taking a guess and I know you didn't mention licensing.

For the entire market of technologies that are used to provide control functions in the home the ranking goes roughly

proprietary 400MHz, UPB, X10 - 100%

INSTEON, ZigBee, Z-Wave - Everything else.

If you turn it around and look at technologies where there are new design wins it is primarily 400MHz (Point to Point), + the I - Z gang.

Can you please rephrase or explain that? I don't understand. Is that a ranking? How does 100% get in the middle?

 

[WayneW]

Doubt market share reports will affect my decision. I will go with a balance between cost, reliability, ease-of-use, and functionality.

Hmm, are you sure market share doesn't matter to you? Personally, I see some relationship between market share and long term survival. Unless I deliberately choose to be on the bleeding edge, I want something that I know will serve me for many years. In my case, as a knowledgeable DIYer, I chose Insteon for my home and knowingly lived on the edge for a while.

Personally, I am disappointed that UPB has NO presence at CES. How can you gain market share and mindset when you are not out in front of the people? Do a Google news search for UPB CES and you get ZERO hits. Some may claim that UPB is a pro product and this is a consumer show, but Lutron has a CES announcement and all the UPB competitors are there. Z-wave & Insteon are aiming for the Home Depots & Lowes and their huge customer exposure. How many homes in the USA have Lutron (or some other pro product) versus how many have X-10 (the DIY king for years)? I am not saying that UPB will not survive, but it will never have the 3rd party products and support that its competitors do if UPB stays as a pro only type of product. And if Z-wave and Insteon get all the consumer market attention, that will make it even harder for pros to sell a product or brand that the customer has never heard of.

 

[hucker]

Personally, I am disappointed that UPB has NO presence at CES. How can you gain market share and mindset when you are not out in front of the people? Do a Google news search for UPB CES and you get ZERO hits.

I agree. I opted for UPB on technical merits as well as the fact that there were multiple vendors (SA, HAI, PCS). I've accumulated some of the hardware over the last 5 months and have been happy with my testing. From a technical standpoint I have little worry that UPB will work great in my house.

What worries me is that I see lots of announcements for the insteon, zwave type products and AFAICT 0 new product announcements for UPB from any vendor. Don't get me wrong, everything I need today is available but if the technology doesn't evolve it will die.

Chuck

 

[Jim Doolittle]

OK. I concede that market share would be a factor when we start talking about < 10%. Then, reliability, ease-of-use, and other factors become irrevelant if a technology cannot produce a profit.

However, if a company can use a given technology to yield a profit and continue to support said technology while providing value added, quality made products, then market share is less a concern unless you are a shareholder in the company expecting your holding to be a growth stock.

Not sure why UPB would not be more visible at CES but I have seen other great products that have avoided "trade shows". Maybe I should limit my UPB exposure until I find out how well the UPB marketing companies are doing financially...

 

[electron]

UPB is mostly targeted at installers, not DIY consumers, so I am not surprised you didn't see them at CES. Just compare CES with EHX, and you will what market UPB manufactures consider important.

As for the market share, doesn't mean much to me at all (in this case, these are different markets anyways), it's easy to inflate/misrepresent the real numbers. There are 3 major UPB manufactures of light switches, while there is only one INSTEON light switch manufacture (as far as I know).

 

[hucker]

There are 3 major UPB manufactures of light switches, while there is only one INSTEON light switch manufacture (as far as I know).

That is why I didn't choose INSTEON.

 

[WayneW]

UPB is mostly targeted at installers, not DIY consumers, so I am not surprised you didn't see them at CES. Just compare CES with EHX, and you will what market UPB manufactures consider important.

As for the market share, doesn't mean much to me at all (in this case, these are different markets anyways), it's easy to inflate/misrepresent the real numbers. There are 3 major UPB manufactures of light switches, while there is only one INSTEON light switch manufacture (as far as I know).

I am just making the point (or stating my opinion) that if UPB doesn't get consumer mindset and/or 3rd party products added, it will stagnate as a pro-only lighting-only system. That doesn't make it a bad product, just a niche product. That doesn't mean it will fail, but it will not expand rapidly. I don't wish anything bad upon UPB, I think it is a great system and at a competitive price point it would sell even better.

If Insteon were not selling in large numbers, then I would be concerned about the single source issue. But I could make a case that one large public vendor carries more clout than multiple smaller niche vendors. Only time will tell. And there have been some rather successful single source companies, ie Microsoft Windows.

 

[WayneW]

More Suppliers Embed Insteon Into Home-Controls
By Joseph Palenchar -- TWICE, 1/10/2007 1:24:00 PM

Las Vegas — At least three more companies here launched their first home automation products incorporating the no-new-wires Insteon technology developed by SmartLabs.

The introductions by D-Link, Carrier, and Weiland Sliding Doors will bring the number of companies announcing Insteon-enabled products to about 15, said SmartLabs business development VP Ken Fairbanks. About 50 Insteon products will be available in the first half, he said.

D-Link will show an Insteon-enabled router that will enable consumers to access their Insteon home-control system over the Internet from a remote PC. Carrier will show thermostats, and Weiland Doors will show high-end doors that slide into exterior walls.

The applications are on display at the SmartLabs booth.

Also here at the show, Best Buy is announcing plans to offer Insteon-equipped home-automation/control system installed by the Geek Squad. Although the products will be available in stores, Best Buy is mainly targeting builders and installers, Fairbanks said.

Other companies offering or announcing Insteon products include Hewlett Packard, ventilation-fan maker Broan Nu-Tone, pool and spa control maker Balboa Instruments, and safety-sensor maker BRK Electronics. Lighting supplier Osram Sylvania, access-control supplier Duchossois Industries and Siemens are members of the Insteon Alliance supporters group but haven’t yet announced products.

read the rest at http://www.twice.com/article/CA6406602.html

 

[George West]

George,

So, are you saying that Insteon has 40% of the wireless control market??

Acttually no. INSTEON has (approx) 40% of the part of the home control market that gets the press and media all steamed up.

For the big dog in wireless control check out http://www.irda.org/

Roughly 300M chips shipped in 2005.

George
www.wtrs.net

 

[George West]

We forecast both units and revenues. In this case the chip ASPs are close enough that it doesn't make much of a difference.

Does ASP = 'Average Selling Price'? From your comment, is it safe to extrapolate this statement: "The required proprietary hardware chip and licensing cost for Insteon, Z-wave and UPB are close enough that it doesn't make a difference in their retail pricing"? I am jsut taking a guess and I know you didn't mention licensing.

For the entire market of technologies that are used to provide control functions in the home the ranking goes roughly

proprietary 400MHz, UPB, X10 - 100%

INSTEON, ZigBee, Z-Wave - Everything else.

If you turn it around and look at technologies where there are new design wins it is primarily 400MHz (Point to Point), + the I - Z gang.

Can you please rephrase or explain that? I don't understand. Is that a ranking? How does 100% get in the middle?

Hey Wayne,

Well I was in a hurry with my post...

We forecast two things, shipment volumes and average selling price. In this case the 40% number refers to the number of (INSTEON, ZigBee, Z-Wave) chips shipped. This represents a rough proxy for the number of products that actually made it out to the market and were purchased by someone. It is not a perfect measure although it turns out to be pretty good. Since the average prices for chips using the different technologies is roughly equivalent we use number of units instead of dollars. The way you phrase it is about right. The only thing is that we looked at ZigBee instead of UPB.

You bring up a good point. Right now the prices of the underlying technologies are close enough that there shouldn't be the large discrepancy in retail prices that we see for the different switches and such.


About the 100% in the middle.

I expect that all of us reading this are pretty comfortable with the idea that X10, UPB, IR and different proprietary RF solutions have been around for long enough that the number of products in the market using these technologies totally swamps any of the newer technologies. We have pretty big sales forecasts moving forward for all of the above mainly as replacement or enhancement to existing products or deployments. We just don't see a lot of new design wins happening using those technologies.

It's sort of like BlueRay/HD-DVD. Compared to sales of regular DVD players the shipments numbers are about 0% of the total. It is only BR/HD-DVD that anyone in the press cares about. Trying to explain the comparison is tough when you are told to do it in one or two sentences.


Why don't we look at UPB?

The short answer is that nobody asks us about UPB.

A longer answer is that we don't see any companies that want to take UPB into the mass market. We are long time admirers of the underlying technology used in UPB. I can't remember when I read the first article about the UPB protocol, although I think it was over five years ago. We definitely looked at it as a competitor to ZigBee when we published our first ZigBee report in 2003.

The issue that we see is that the folks selling UPB products seem to have a good market selling into the pro installer market and don't want to upset that revenue stream. For those familiar with LonWorks it is a similar story to Echelon and its refusal to drop its prices even in the face of competition with similar functionality at dramatically lower price points entering the market.

Hope this clarifies things.

George West
www.wtrs.net

 

[George West]

Interesting discussion. Doubt market share reports will affect my decision. I will go with a balance between cost, reliability, ease-of-use, and functionality. Course those items should lead to more market share but look at what happened all those years ago with VHS versus Beta .

.

I agree completely. No smiley, no irony, just complete agreement.

The Friends and family brigade always ask me what product they should buy. This goes back to about 1985 and includes things like stereos, tvs, pcs, whatever. My answer is always decide what you want to do and then buy the best product that does what you want and you can afford. Don't look back.

Look at all of the great software products that are on the market that let you use pretty much any of the underlying hardware protocols however you want. This makes the selection of a protocol much less critical IMHO. Even if it dissapears you don't need to unbolt everything to enhance or keep your system working.

Hope everyone is enjoying the long weekend.

George