The $$$ Cost of HA equipment

briankelly63

Active Member
In these difficult economic times I thought it might be interesting to have an exchange and gather thought regarding HA equipement and its relative cost.

Too high? Too Low? Just Right?

Some things to consider:

Your average UPB switch can run $60 to $180 dollars yet you can buy a complete Microwave oven, bare bones PC, DVR player or a small air conditioner for less. A split phase UPB or X10 repeater can cost as much as half an M1G system. Automated thermostat $250?. Beyond the minimal parts count in some HA devices what drives the cost...

Assuming we are not in the startup phase of a product and have recovered some initial research, design, marketing investment are we getting a reasonable cost value proposition?

Does passing on the price to a client or using a strategy of 'whatever the market will bear' make this a non-issue?
 
I think it's similar to Starbucks charging $4 for a cup of coffee; it's an "affordable luxury" for most.

Even though there's a recession on, there's still $$ around. It's just that everyone's been taken down a notch. Doesn't mean everyone's eating Franks&Beans though; some who ate nothing but 30day aged Kobe Beef are now downgraded to T-bone (much juicier than Filet).

I doubt that HA companies have recouped the startup costs by any stretch, the market just isn't big enough. And as long as theres dumbasses like me willing to pay $50-$75 for a $4 light switch, theres a small market. I don't think it's value-based billing (yet), but at least "whittle down debt" pricing.
 
too high

+1 whatever the market will bear - they're basically toys for gadgeteers, with no new ongoing construction to drive sales

prices will drop, R&D will drop, new product development cycles will lengthen
 
It's simply a niche market and therefore prices will be much higher.

How many people do you know that own a microwave oven, PC, or DVR player, or an air conditioner? Now how many people do you know that own a UPB lighting system, a automated thermostat, or an X10 repeater? Just like any new technology, the initial prices of these items will always be higher and will tend to drop as market share increases. To be honest, we will probably never see huge price drops in a lot of the home automation devices because the markets share will never grow to the level of a microwave oven.

Don't forget that the initial prices for a microwave oven, color TV, PC, VCR, etc was quite high when they first came out too. They dropped primarily because the market share grew.
 
I think all the manufacturers still have a lot of development to do. Early devices may be working fine but they need to keep producing new devices. Does any brand make every type of device their customers want? Doubtful.

I assume that price is having a big impact on which brands people choose. Insteon is cheaper than UPB, so it's more common, even though more people said they would use UPB if they started over now. Why is it cheaper? To what extent is there an actual difference in costs and to what extent is it a choice about margin in order to grab market share?

Probably there are too many brands for the market to support. That dilutes everyone's market share. More sales would mean the development costs could be spread out more, units could be cheaper, there would be more sales, spreading out development costs more, etc.
 
I agree with IVB, Neurorad and sic0048

Whatever the market will bear + it is a Niche market and therefore attracts persons whom can actually afford the higher prices + Thank goodness I'm still eating fillet!
 
Yep, simply a matter of proliferation. Once builders start including these products in production homes, we should see the prices start to drop. If any of my friends knew how much I actually spent on HA, they would probably be gasping for air.

IVB...thanks for the images I now have in my head...your post took me back to There's Something About Mary. :)
 
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:)
 
IVB...thanks for the images I now have in my head...your post took me back to There's Something About Mary. ;)

heh, i forgot about that. I was thinking Seinfeld, specifically the episode where George wanted to be called "T-Bone"...
 
Too high? Too Low? Just Right?
Too high, regardless of the economic times. Granted, I'm cheap, and have been since my first allowance. Which means that I shop very carefully, lol spending more of my valuable time doing that than I will recoup in savings, and take a long, long time to commit to a purchase.

But really, $500 cams, $300 thermostats, these are the typical prices and you don't buy just one at a time -- the product content simply cannot justify the price. Wall switches at $60-90 each, even simple temperature sensors, bunches of Hobby Boards and miscellaneous interfacing, before you know it you're in the thousands again. It is only the HA commitment that breaks the barrier.

Still, some things make me laugh and I will *never* pay the asking price. For example, the SH catalog -- laughable. From the mailbox into the trash.
 
Low volume generally means high prices. Research and development have to be paid for somehow.

I think some of the prices are in the right range, such as UPB lighting and certain brands of IP cameras. Certain touch screen systems seem to be too high. My system brand wants $3000 for an 8".

I don't think it's a catch 22 situation, however. I just don't think that HA currently has enough appeal for most home owners and I don't know that it will in my lifetime.
 
Most people look at it as added value, not a collection of parts. Yeah, I could build everything myself. Some basic engineering skills and you can run all of your lighting power to a central relay panel and control those relays. But, by the time you build a dedicated controller, wireless remotes, protocols for automation integration, etc, you have paid yourself for a month's worth of work. Most of us would rather just buy it for a few grand. A lot of industries stay like this until someone moves in and is willing to swallow their R+D cost in order to get volume. As automation gets bigger someone with big pockets will do just that, and likely put most of the other guys out of business. I appreciate the innovation of having so many small players in the field, not looking forward to the day where there are only 2-3 mass market brands out there.
 
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