AT&T Ventures into Home Security and Automation Field

AT&T Inc. is currently venturing into security field to look for gains outside its slowing cellphone business.

Online PR News – 05-June-2012 – Dallas – AT&T Inc. is currently venturing into security field to look for gains outside its slowing cellphone business. Today, AT&T declared that it will start selling home alarm services in Dallas and nationwide in a move to challenge the business leader ADT.

AT&T’s competitors, including cable TV firm Comcast Corp. (CMCSA) and telephone firm Verizon Communications Inc., have barged into the smart home market, security with some other smart features. For these cellphone and cable firms, this move targets on finding sales returns opportunities beyond the slowing wireless-subscriber and pay TV markets. President of AT&T emerging devices, said that AT&T is just selecting the right time to jump in the security industry, for it’s still a fragmented industry at present.

This service, which is named Digital Life, allows home owners to monitor their houses through cameras and turn on their residences remotely by using computers or cellphones as well as obtain a 24-hour home monitoring service, AT&T announced the service today at the International CTIA Wireless event in New Orleans. The technology, which is from Xanboo, a firm AT&T acquired in 2010, uses its central control panel to wirelessly link with residents’ cameras, lightings, thermostats as well as all the sensors in the households.

The installation and services will be sold in AT&T stores, beginning with a trial in the next few months in Dallas and Atlanta.

Tyco International Ltd. (TYC)’s ADT unit is the greatest home security firm in U.S. that dominates the home security industry. Last year, the security-solutions sales of Tyco’s reached $8.63 billion, Bloomberg data shows. ADT sells its home security and monitoring package for $50 per month with a $200 installation charge. Verizon sells this for $220 with a $10 monthly fee. However, in some small security firms, they make their prices much lower than them. For example, a smart home security package from Dallas home alarm monitoring company only sells for $45.95 per month with a $49 installation cost.

Though there are so many home alarm monitoring firms in the market, AT&T makes use of its simplified user handling process and technology to allow users to control the system via the Internet or cellphones from anywhere. The new system can be a monumental leap for AT&T as well as the world marketplace.

Since almost all adults in United States have already had mobiles, and only 23 percent of the households have home monitoring systems, the motive for AT&T is to try to win a market profit that still has plenty of room for growth.

Bloomberg data also reveals that operating profit margin at AT&T’s wire-free business was more than 24% while it is less than 16 percent for Tyco’s security-solution business unit. This may indicate that one challenge that AT&T has to confront is to offer the service without sacrificing profit margins. AT&T is showing its ambition with the aim of selling security services nationally, not just offering security services in Dallas. ”We have been evaluating this issue for a long time and it turns out that AT&T’s Digital Life doesn’t harm profit margins,” said Lurie. “We are confident of increasing profit margins with this business”.