#SIASNG15

Gordon HopeHoneywell

New Faces, New Places: Evolution in the Residential and

Consumer Markets

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Kevin PetersenAT&T Digital Life

New Faces, New Places:Evolution in the Residential and

Consumer Markets

Letha McLarenIcontrol Networks

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Securing New Ground 2015 4

New Faces, New Places:Evolution in the Residential and Consumer Markets

Today’s savvy consumer expects pervasive connectivity and instant feedback in their business and personal lives. In the residential and consumer markets, the response to this demand has been an array of interactive services, applications and lifestyle enhancements on top of traditional security offerings.

This session explores how this market is being redefined and the opportunities to expand your business from the insights provided by the panel participants.

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Securing New Ground 2015 5

New Faces, New Places:Evolution in the Residential and Consumer Markets• Kevin Petersen - SVP, AT&T Digital Life• Letha McLaren – Chief Marketing Officer, iControl• Gordon Hope – Moderator, Honeywell

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Goals of this Session• Explore major changing trends driving change in consumer wants and

needs• Learn from newer entrants about the reasons behind their success• Develop recommendations for companies evaluating this space

Securing New Ground 2015#SIASNG2015 6

2013 2014 20150

10

20

30

40

50

60

70

80

3831

38

55 55

70

% of Security Systems Sales Including Remote Monitoring and En-hanced Features (Q3/2015)

(Among Respondents Offering Smart Home Devices as Well as Security System)

Today 2 Years from Now

% o

f Sal

es w

ith B

oth

Secu

rity

Inte

racti

vity

and

Sm

art H

ome

Dev

ices

Source: Parks Associates’ Annual Security Dealer Survey (2013-2015)The New Face of Home Security – 2015 Edition | Copyright 2015 Parks Associates

84% Growth in Participation Two Years from Now

Securing New Ground 2015 7

Questions

“How do you believe your company has changed (or contributed to the change) that these numbers reflect and project for the future?”

“How do you define success through your eyes?”– Blended service growth?– RMR revenue growth?– Reduction in attrition on the bigger set of services?– Other?

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#SIASNG2015 Securing New Ground 2015 8

Myself; 10%

Friend or Family; 4%

A contractor that I hired; 8%

The company that sold me the security system; 61%

My home already had a security system when I moved in; 15%

Don’t' remember; 2%

Source: American Broadband Households and Their Technologies Q3 2014 | N=10,000 +- 0.98% || The New Face of Home Security – 2015 Edition | Copyright 2015 Parks Associates

Installation Method Used by Broadband Households with Active Security System (2Q 2015)

Securing New Ground 2015 9

Questions• The previous chart points to two observations:

– There is a growth in the percentage of installations that are done by “Myself” although it is not a large share; and

– There remains a strong pull for the professional installation of security systems from the company that positioned and sold them to the consumer

“What is your belief about the future of DIY installations vs. professionally installed and what do you believe this chart will look like five years from today? Why?”

“What impact do you believe companies such as Google and Apple will have over the same time period?”

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Securing New Ground 2015 10

QuestionsConsidering the growth in the “Myself” category of installations and the fact that this statistic does NOT address how the equipment is monitored,

“What do you believe the future holds relative to the growth of DIY installations with professional monitoring?” “What is your view on the changing role of monitoring as the consumer feels more empowered to do it themselves through their powerful portable smart phones and apps?”

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Securing New Ground 2015 11

Security Lens of the Installation/Monitoring Matrix

#SIASNG2015

Monitoring

Inst

alla

tion Pr

o

Pro

DIY

DIY

Core Security Market as it exists today

Growing trend in select traditional Security Companies

Threat or Opportunity?

X

#SIASNG2015 Securing New Ground 2015 12

Completely Disagree

2

3

Neutral

5

6

Completely Agree

0 20 40 60 80 100 120 140 160 180

51

57

72

91

110

150

153

|Source: American Broadband Households and Their Technologies Q2 2015 | N=5,000 +- 0.1.39% |The New Face of Home Security – 2015 Edition | Copyright 2015 Parks Associates

Relative Attitude Towards New Technology (Q2/15)Among Owners vs. Non-owners of Security Systems in U.S. Broadband Households

“I like staying on top of new technologies and owning the latest device.”

#SIASNG2015 Securing New Ground 2015 13

At Least 1 Smart Device

At least 1 Streaming Media

Device

35

38

13

29

7

26

Non-Security Broadband Households (75%)

All Broadband Households (100%)

Broadband Security Households (25%)

Source: American Broadband Households and Their Technologies Q2 2015 | N=10,000 +- 0.98% |The New Face of Home Security – 2015 Edition | Copyright 2015 Parks Associates

High Tech Device Adoption in Broadband Households (2Q 2015)(Values are % within each category)

Securing New Ground 2015 14

QuestionsConsidering the strong correlation between the use of technology and ownership of a security system among broadband home owners as well as the increasing evidence that Baby Boomers are technology savvy enough to deal with the technologies now and moving forward (and are positioned to afford them)

“What must companies do within their marketing campaigns to ensure success for their existing as well as future customers?”

“What differences in marketing techniques are deemed appropriate to address the Baby Boomers vs the Millenniums?”

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Les Gold Mitchell Silberberg & Knupp LLP

Follow the Money: RMR, Valuations & Lending

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Will SchmidtCapital Source

David StangStang Capital Advisory

John MackImperial Capital

Follow the Money: RMR, Valuations & Lending

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17

Historic and Projected 1M LIBOR

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18#SIASNG15|securingnewground.com

Kirk MacDowellAlarm.com

Market Leaders Perspective:How Established Companies Stay Nimble

and Relevant

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Timothy J. WhallProtection 1 Security

Market Leaders Perspective: How Established Companies Stay Nimble

and Relevant

Pam PetrowVector Security

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21

Poll #1 (New Entrants)

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