Internet Home Alliance Research Shows Half of Newly Constructed Homes will have "Smart Home" Feature

Home Security System, Pre-Wired Cable/Satellite TV and Home Theater Top the List of Most-Purchased Home Technologies

Monterey, CA, February 15, 2005 - US housing starts jumped 11% in December from the prior month and, according to US Department of Commerce statistics, home starts are rising at levels not seen in 25 years. But are these new homes "smart homes" filled with wireless home computer networks, security systems and other home technologies? Is the "home of the future" happening today? Or are smart homes still more Jetson fantasy than suburban reality?

To find out, Internet Home Alliance, a cross -industry network of leading companies advancing the home technology market, surveyed more than 400 consumers nationwide who are either owners of newly constructed homes or prospective buyers of newly constructed homes. The purpose of the study, which was led by Alliance members CompUSA, Cisco, CompTIA/HTI+, Hewlett Packard, Home Director, Invensys, KB Home, SBC Communications and Whirlpool, was to understand better the wants and needs of consumers who own or expect to own a newly constructed home and how consumers will make decisions about purchasing, installing and maintaining home technologies.

Following are the key findings from the report, which may be downloaded for free at the Internet Home Alliance web site,

Technology Options and Preferences

• About half of the target consumers (49%) presented with at least one home technology option made a purchase. The most commonly purchased home technology option is a home security system followed by pre -wiring for cable or satellite TV and a built -in home theater.

• The home technologies that are most important to current and prospective newly constructed home buyers are pre -wired cable/satellite TV and a home security system, both of which consumers indicated should come standard in newly constructed homes. Voted "somewhat important" were structured wiring, multi -zone HVAC, an air purification system, a wireless home computer network, an energy management system, a community -wide high -speed Internet connection, a home control/automation system and lighting control. Consumers gave a "neutral" importance to Web cameras and an Internet refrigerator.

• A majority of consumers said they were either "somewhat" or "very familiar" with many of the technology options available. Most were not familiar with Internet refrigerators and home -based health management systems.

• Outside of the technologies that come standard, the most popularly presented technology appears to be an intercom system/distributed audio followed closely by central vacuum and home security systems.

• Participants summed up their experiences around these options with one word, "overwhelmed." The Alliance's research found that technology options are often the last -mentioned options and they are often presented in a cursory, checklist fashion.

• Consumers reported that they would prefer to purchase options after seeing them featured in a showroom.

• Most target consumers (69%) considered making one of more technology purchases for their newly constructed home independently of their builder.

Technology Vendor Preferences

• Most consumers would prefer to have a certified professional install and maintain infrastructure technologies and major appliances.

• A majority of consumers lean towards a consumer electronics store for presenting consumer electronics items and a professional installer for setting them up and maintaining them.

Mortgage -Based Financing Options

• A majority of newly constructed home buyers (53%) expressed great interest in rolling up the costs of their new home technologies, particularly pre -wiring for cable or satellite TV, structured wiring and multi -zone HVAC, into their home mortgage.

Home Buying Process

• Most target consumers acquired or plan to acquire their newly constructed home in a planned subdivision. The chance to start anew with a "clean canvas" or to live in a home with a "better design or floor plan" are the most common reasons consumers purchase newly constructed homes. In the focus groups, many viewed this as an opportunity to personalize their homes to suit their tastes.

• A majority of both current and prospective newly constructed homeowners consider the home builder a "very important" consideration in their buying decision. In addition, most current owners of a newly constructed home are "very satisfied" with their homebuilder's efforts on their behalf. Most indicated they researched and found their home builders by word of mouth.

"We were delighted to learn that the concept of the connected home is, indeed, becoming a reality," said Tim Woods, Internet Home Alliance's Vice President of Ecosystems Development. "The understanding of, and keen interest in, a wide array of technological products for new homes validates our belief that we are moving quickly towards a turning point where many of the 'futuristic' products and services will integrate into being standard components of new homes."

Research Methodology

The results cited in the American Digital Dream research report are based on a two -phase study that included focus groups conducted in Denver in June 2004 and a Web -based survey of 404 target consumers administered in September 2004. The margin of error associated with a sample size of 404 is +/ - 5.0 % at the 95% confidence level. This means the results come within plus or minus 5.0% of the results that would have been obtained given a census of all qualified individuals.

About Internet Home Alliance

Internet Home Alliance is a cross -industry network of leading companies advancing the home technology market. A non -profit organization, the Alliance provides companies with the collaboration, research and real -world testing opportunities they need to launch their home technology products more quickly, successfully and cost -effectively. Members of the Alliance, which was founded in October 2000, come from a variety of industries and include such leading companies as Cisco Systems, Inc., General Motors, Hewlett -Packard Company, IBM, Invensys, Microsoft, Panasonic (Matsushita Electric Corporation of America), Procter & Gamble, SBC Communications, Sears, Roebuck and Co. and Whirlpool Corporation. For more information, visit

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