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Industry opinion - With big box players like PC World now offering a Connected Home service, what are the opportunities and threats for the custom install home automation trade? (1/1/2007)

By Yasmin Hashmi, HiddenWires

The Connected Home is a major new initiative, launched by PC World, that provides customers with a digital lifestyle and home automation service.

According to PC World, the Connected Home is designed to help customers enjoy all the benefits of a connected home, and offers a bespoke solution tailored to meet both their needs and aspirations. It puts the power of the Media Center PC at the heart of home entertainment, providing customers with an exciting, fully integrated, digital experience, and brings together a wide range of digital entertainment, computing, audio, visual, security and home automation products, which are all controlled by a single intelligent remote control.

The Connected Home has a team of experts on hand to ensure that customers are given star treatment, guiding them through each stage of the Connected Home process from choosing their digital lifestyle system, through to fully managed installation and aftercare support and advice.

Following an initial in-store demonstration, a professional Connected Home consultant will visit the customer's home, offering expert advice and discussing their individual needs in detail. This is followed by a complete home survey designed to ensure a speedy and professional installation. Once the customer is happy with their customised package, professional experts will install every element of the Connected Home, from a single room experience through to a fully operational installation of networked digital technology including the integration of customers' existing technology where required.

Once the installation is complete customers are provided with support and advice for up to two years which includes an in-home system check every six months, accidental damage cover and on-site engineer attendance within 24 hours. This ensures that customers will continue to get the best from their home entertainment experience for many years to come.

The Connected Home is offered by PC World in association with Microsoft, which means that customers get unrivalled experience and service in the digital home entertainment market. It offers customers the widest range of Media Center, Vista (from January 2007) and Harmony driven digital home entertainment and home automation products. In addition, customers can take advantage of some of the lowest prices on some of the best entertainment brands in the market including names such as KEF, Sony, LG, Pioneer, Nevo SL, Sonos and Panasonic plus many more.

An example entry-level configuration for a single living room set-up including a 32" LCD TV, home cinema amplifier, surround sound speakers, Media Center PC, installation and two years after sales care is priced at £3499.99 including VAT.

The Connected Home is offered exclusively by PC World, the UK's leading chain of computing superstores, and part of DSG international plc. Current showrooms are open in four stores, two stores in London (Tottenham Court Road and Staples Corner) and one each in Birmingham and Manchester, offering a nationwide installation service.

HiddenWires asked key industry figures in the custom install home automation trade for their opinions regarding the opportunities and threats posed by this development.

Robin van Meeuwen, Managing Director, Crestron UK

"I really don't see the service that PC World is offering as a threat to the custom installation market. We are talking about two totally separate market segments. To take an analogy from the car industry: if PC World is Ford then Crestron is Bentley. And when Ford brings out a new model, Bentley doesn't panic about losing sales. However, the owner of the Ford may aspire to a Bentley - and one day realise that dream. Custom installation is aimed at the higher end of the residential market, which is why it called 'custom' installation; it is a bespoke solution tailored to an owners individual tastes, requirements, and a budget that can afford high quality and luxury. At the other end of the market, higher volume equals low price and very simple functionality."

Timothy Penn, Managing Director, AMX UK Ltd

"The big box players can offer simple connected home services at much lower prices than the current custom installation providers. They cannot, however, provide the high level of sophistication or the service and support required for successful integration of technology into the home.

While more exposure for our industry and the technologies that we sell and support is always a good thing, we must be prepared for the consumer backlash that might occur as low-end solutions are installed that do not meet the customer's needs or expectations. This does have the potential to generate negative feelings about the growing home automation industry, so, as the industry matures, it is important that we continue to generate positive press about the level of service and sophistication that we provide, as well as regular PR and opinion pieces about successful installations from happy customers."

Chris White, Managing Director, In Touch Technologies (UK)

"This will take our market in a great direction, in the short term it will generate a much needed injection of interest in the whole of our home automation market, especially at the value-branded, consumer end. If we price our solutions and services well, it will generate a wealth of additional business for us all. In the mid to long term, I think business will also be generated from the mistakes, poor advice and general distrust of the large retail shed outlets to be able to do anything well - both in terms of new business and sorting out DIY disasters."

John Guyatt, Managing Director, O2M8

"This is very interesting news, although I suppose not too much of a surprise as they (PC World) are simply extending their reach from PCs to Media Centres, which are just fancier PCs with a more intuitive, structured menu system. PC World are focusing their efforts on the A/V market at this stage which is the right choice as getting into real home automation will be much more problematic as there are no international standards (except perhaps IP-based equipment) and many of the proprietary systems that could be used would be difficult to integrate together without the right technical skills.

PC World fancy their chances developing the mid-range A/V market with this approach as it is difficult to imagine the supremely wealthy driving along to their local PC World to purchase a media centre system. The very wealthy are normally handled directly by the CEDIA organisation and their installers with their differentiator being care and attention and the ability to do customised projects for their customer. You can't imagine PC World wanting their qualified engineers/installers doing custom projects for each of their customers and certainly the normal consumer would not want to pay the substantial amounts of money needed to get them done.

So I think this is positive news for the AV industry as it develops awareness across the land and de-mystifies the technology somewhat to the benefit of everybody in the industry. Further out the next step is to bring the true home automation system into the Media Centre menu and then the problem is what equipment and types of system will be used. Without some form of control and communication international standard it's difficult to see how the consumer and the market would benefit. It would be similar to the Beta Max and VHS battle in the past which seems to be repeating itself with HD-DVD and Blu-ray. Our view is that an IP-based infrastructure will become the standard and offer the kind of plug and play capability needed to drive growth in the mid-range home automation market."

Nick Van Tromp, Sales Engineer, Dynalite Europe

"We are a lighting controls manufacturer and provide custom installers with expert advice on lighting controls so that they can focus on the audio visual design and installation. Wherever possible, we provide full bespoke network schematics to ensure an efficient installation process. We offer a wide range of custom finishes on our products to meet the client's requirements and the necessary integration devices to best suit the other home automation systems as specified by the installer. To back this all up, we provide full technical support to ensure that our products are properly implemented.

From start to finish, the custom installer works closely with the client and we work closely with the installer. The end result is a seamlessly integrated audio visual and lighting control system which often far exceeds the client's initial expectations. Only with such close working relationships is it possible to provide the solutions and levels of service which can be seen time and time again in the custom install and home automation industry. This is why we do not feel that the likes of PC World will be a threat as they will never be able to provide the same level of service and support as the people in our industry can."

Tony Cheeseman, Managing Director, IQYourHome.com

"It can only be good to have these bigger players coming into the market, since at present, we have a niche market that is struggling to become main stream. As the bigger players start to focus on the industry, it will provide the drive to move the market forward. The bigger problem is how the electrical contracting, security and AV industry is going to cope with the merging of their respective technologies, and how sufficient tradesmen are going to be trained to deal with the step change that is already taking place."

Darryl Mattocks, Managing Director, Domia

Once reserved purely for the pent house brigade, the arrival of affordable home automation onto the high street has meant that the smart home has now become an accepted and integral part of contemporary living. Several factors such as Internet and broadband access, and the growth in home networks are contributing to greater consumer awareness and market knowledge of smart homes, and consequently the demand for home automation products.

Retailers such as PC World are influential in bringing this new technology in reach of the average home owner by offering a completely different level in integration and product from a custom install. Simple home automation starter kits available on the high street can act as a good introduction to the smart home concept. Customers who buy a simple plug and play home automation starter kit on the high street are often likely future contenders for a custom installation solution as budget and confidence in the technologies grow and they choose to upgrade their smart home system.

On the flip side, the greatest threat from the high street service is the potential lowering of price brackets for the whole industry, which may lead to it becoming a price- and not service-driven industry.

If you would like to comment on this issue, or to be included in future opinion pieces, please send an email to opinion(AT)hiddenwires.co.uk.