How Many Automation Companies Do We Need?
If you walked the CEDIA EXPO floor, you found dozens of companies offering some form of home automation product.
Some of these companies have been in business for less than two years. Others are newly formed. And, of course, there are the longtime stalwarts of the category.
One wonders, however, how many more automation companies our industry can support. And why.
Look to the automotive industry and you’ll see some parallels. Remember Corbin? Mercer? Watrous? They’re a few of the 1,000-plus automobile companies that manufactured cars in the U.S. since 1900.
Here’s the arc of product development. At first, a few brave companies invest in the engineering to develop a product and a market—like Karl Benz and Gottlieb Daimler in Germany did in the mid-1880s. As consumer awareness and excitement grows, more pioneering manufacturers enter the fray.
By 1900, American manufacturer Ransom Olds took proven technology and applied manufacturing engineering, developing the first assembly lines. Ten years later, Ford built on these principles and effectively lowered manufacturing costs until cars became affordable to the masses.
Olds and Ford battled for market dominance among the thousand other small-time manufacturers. And although other manufacturers may have produced vehicles with more advanced engineering, greater styling or enhanced performance, 99 percent of these competitors failed (or were purchased). The market consolidated around the strongest suppliers—and not necessarily the most innovative suppliers.
This arc isn’t unique to the automotive industry. We saw the same parallels in PCs—remember Altair, KayPro, Commodore?—and most other capital-intensive, technology-driven industries, like computer chip manufacturing.
The Here and Now
What does this mean for home automation? Certainly the “big boys” have a leg up on the competition. Each has a track record, an established dealer network, a depth of engineering and a secret horde (if they’re smart) of competition-killing products. Or at least a stash of cash to buy pesky competitors they can’t out-engineer.