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Verizon reboots its home monitoring service

Matt Hamblen | Feb. 13, 2014
Service, first launched in 2011, is no longer offered to new customers; next-gen expected later in 2014.

Verizon had 6.1 million FiOS customers and 9 million wired broadband customers at the end of 2013, according to Verizon's latest earnings report.

Gaw said the success rate of smart home services "has been uneven to say the least." On the successful side, Vivent has more than 800,000 subscribers for home security and automation, while ADT has 615,000 customers for its Pulse service.

Nest, which was recently purchased by Google for $3.2 billion, offers some do-it-yourself services for remotely-managed thermostats and smoke detectors. Gaw called that one of a number of solutions that are a "mixed bag" because the technology needs to be explained to customers, taking time and expertise.

Other companies offer similar services as well, with varying levels of technical support. They include Comcast's Xfinity Home, AT&T's Digital Life and Time Warner Cable's Intelligent Home.

Aside from Verizon, some other telecommunications companies have had to reassess their smart home services, including Telefonica UK, which closed its remote health monitoring service used in homes in July 2013 because of lower than expected subscribers, according to Morgan Mullooly, an analyst at Analysys Mason.

Part of the problem with Verizon's service could be that customers might not expect or desire home security and automation services from a telecommunications provider, as opposed to a long-time security-focused company like ADP, said Steve Hilton, an analyst at MachNation. "In the case of security, thermostats and light controls, why buy it from Verizon?" he said.

And with the Verizon approach, customers had to have expertise. "These solutions are not plug-and-play, and they require someone with a modicum of technology experience to set them up and manage them," Hilton said. "Also, not all thermostats are the same, and my guess is the lighting control required a certain type of lighting system in the home."

Mullooly said Verizon's reboot of the Home Monitoring service will be an extensive proposition. "This investment involves hiring lots of vertical veterans and subject matter experts and also extends to spending a lot of time and money evangelizing solutions in the market."

"In other words -- lots of sunk costs," Mullooly said. "It can take a while to evangelize the market for a bold new product. Perhaps the entry of a consumer electronics giant like Google into this space will act as a catalyst for consumer demand for these types of solutions."

 

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