"The company has an astounding 100 million US installed base of home automation systems. This includes both modules, such as plug-in lamp or appliance modules that turn off the lights, and controllers, which turn something on via remote control, timer, telephone, computer, etc. Dave Rye estimates that about 5 million homes have X-10 modules."
Case Study Interview
Mention X-10 in the home automation market and everyone has an opinion about this company, good or bad. As a sage once commented to me, this means they're the market leader. The X-10 standard has been around for a generation, literally 20 years. X-10 is a private company that OEMs its products through major retail outlets under brand names such as RCA, IBM, GE, and Radio Shack.
The case study consultant interviewed Dave Rye, Vice President and Technical Manager at X-10. X-10 regards itself as being number one in the home automation business, having been concentrating on this marketplace for about twenty years. The major part of X-10's business is at an OEM level for IBM, RCA, Leviton, GE, and Radio Shack. The company also sells products under its own name in its retail division. X-10's products are marketed by Radio Shack under the Plug 'n Power label and this is obviously a volume mass market channel for the company. While X-10 is often equated with Radio Shack, the company has substantial business beyond that specific retailer.
The computer interface performs sequence macros, such as a coming home macro, a going to sleep macro, or a having a party macro. To initiate a macro, a user only has to press a button on the remote control. However, the ActiveHome has a battery back-up built into it and can function as a stand-alone unit, once set up initially via a generic PC. This product is marketed, in a different form, by IBM as the Home Director with the Aptiva PC.
The Home Director is customized for the Aptiva PC, such as waking the computer up to tell it to do something. As soon as the end user gets the computer out of the box, he/she can turn something on or off. It can then be expanded to work with a whole range of X-10 products. The ActiveHome and Home Director product has only been shipping for 4 months and is being sold in all X-10's branded and non-branded distribution channels, computer outlets, specialty electronics stores, Radio Shack, etc. A version for RCA is being developed for sale in mass merchants like K-Mart and Wal-Mart.
In addition to home automation products and remote controls, X-10 also makes a 2.4GHz Video Sender for digital satellite systems (DSS) that can send DSS channels to any TV in a home. Dave Rye estimates that there is a DSS installed base of 3 million. X-10 will incorporate this into its computer technology, to play computer games on a TV or surf the Internet. In addition, a big part of X-10's business is home security systems.
X-10 manufactures a self-installed wireless home security system for Magnavox, and Radio Shack. This product sells for $200. X-10 also offers a corresponding monthly monitoring service, from their monitoring station ORCA, for an additional $20/month. Located in Seattle, this monitoring station will dispatch the police if an intruder is detected. The home owner has no idea the dispatch call to the police is coming from Seattle. Home automation features in the security system will cause all the lights on the house to flash, so the police really know where they are going.
The company has an astounding 100 million US installed base of home automation systems. This includes both modules, such as plug-in lamp or appliance modules that turn off the lights, and controllers, which turn something on via remote control, timer, telephone, computer, etc. Dave Rye estimates that about 5 million homes have X-10 modules. After a user has initially purchased an X-10 unit, he ends up a year or two later with an average of 20 X-10 units in his home. Dave Rye sees this 20 average units per user rising over time. Customers that have the X-10 computer interface end up with more than 20 modules. Sales of X-10 products primarily sell for use in existing homes in the US, with the rest of the world being a minor part. With X-10 products, it is not necessary for the home to be wired or designed a special way when being built. However, X-10 perceives a trend towards the PC being used as the "central brain" of the home automation network. The company is heading towards the maximizing the use of PCs in its home networking strategy.
Dave Rye believes that standards are very important, but that X-10 became a de facto standard by virtue of its huge installed base. In the future, X-10 will sell more and more products, and it will become more and more of a standard. Dave Rye states "With marketing efforts by companies like RCA and IBM, the volume will really take off!"
One of the benefits of X-10 products and technology is its low cost. This allows large numbers of users to try home automation out. X-10 manufactures its products in China, which is one of the cheapest places there is. Often Plug 'n Power products will be on sale at Radio Shack for $9.99, discounted from $12.99. Dave Rye says that the home automation naysayers are simply X-10 competitors playing catch-up.
Dave Rye addressed the primarily aftermarket nature of X-10 market with the new home market focused on by other home automation companies. One of X-10's OEMs is Leviton, who is the biggest manufacturer of wiring devices in the US. This allows X-10 to address the new home market for automation via its relationship with Leviton.
The biggest obstacle to home automation is marketing. X-10 has partnered with large manufacturers, such as RCA and Magnavox, which in turn sell to large mass distribution channels like K-mart and Wal-Mart. This partnering has given a real boost to symbiotic marketing efforts, as opposed to X-10 doing it all alone. However, X-10 also uses secondary distribution channels, such as security dealers etc.
For more information on X-10 and its products visit our WEB site at www.x10.com
All trademarks used are the properties of their respective owners.
Dave Rye is a leading authority on Home Automation. He has been actively involved in the business for over 20 years and has written many articles on the subject.
The content & opinions in this article are the author’s and do not necessarily represent the views of HomeToys
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