‘Aggressive’ AT&T Home Automation Push Seen Lifting Low Penetration

AT&T is rolling out its Digital Life home security and home automation platform Friday in 15 markets with “aggressive” plans to be in 50 markets by year-end, said Kevin Petersen, senior vice president-AT&T Digital Life Services, at a New York media briefing. Launch markets are Atlanta, Austin, Boulder, Chicago, Dallas, Denver, Houston, Los Angeles, Miami, Philadelphia, Riverside, Calif., San Francisco, Seattle, St. Louis and select areas of the New York and New Jersey metropolitan area, the company said.

The first markets for what AT&T calls the first all-IP wireless-centric security and home automation solution are in AT&T’s conventional 22-state broadband U-Verse footprint. But since Digital Life is wireless, it’s also rolling out in other markets, including Seattle, Petersen said.

AT&T bought the IP-based wireless platform from Xanboo in 2010, and it’s the foundation for both the security and home automation segments of the service. Today the platform offers monitored security service based on sensors and video cameras along with lighting, thermostat and appliance control. In the future, AT&T wants to extend the platform to other segments including healthcare, small businesses and the car, the company said. The key to leveraging the technology is “owning your own platform,” Petersen said. The platform is ISP-agnostic, Petersen said.

Citing low penetration of security (20 percent) and home automation (1-2 percent) systems in U.S. homes, Petersen said AT&T research shows the biggest barrier to entry is cost. “We're very confident that apples to apples in terms of price, what we're providing” versus offerings from competitors, “is a very compelling value proposition for customers."

Digital Life is available in two main packages, starting with Simple Security, which includes 24/7 home monitoring, 24-hour battery backup, a wireless keypad, keychain remote, recessed sensors and an indoor siren for $29.99 a month, plus $149.99 for equipment and installation. Smart Security ($39.99 a month, plus $249.99 for equipment and installation) adds the option to buy into home automation and includes the choice of three features to add to security monitoring: motion, carbon monoxide, glass break or smoke sensor, or a “takeover kit” to convert an existing security system. Additional sensors can be added at a la carte pricing. Consumers can buy it all at once or add products and services at a later date via self-install, Petersen said. The system has a lifetime warranty, he said.

Home automation features are priced separately in packages. The camera package, available for cameras inside and outside the home, starts at an additional $9.99 a month for monitoring up to eight cameras, plus camera cost and installation. Subscribers can pick one video feed to show on the opening home page for the web service. The energy package -- covering appliances, light switches and Honeywell Z-Wave thermostats -- starts at $4.99 a month, plus equipment and installation. The electronic door lock package also starts at $4.99 a month, plus equipment and installation. Water sensing and water control packages start at $4.99 and $9.99 a month, plus equipment and installation, according to literature.

Petersen said 60-70 percent of household damage claims not caused by natural disasters are water related. “Being able to know about it is one thing,” he said, “but being able to do something about it in real time is another.” A program could instruct the water shutoff valve to turn off if a sensor detected water, he said. A full breakout of prices will be available on the program’s website when it goes live Friday, he said.

AT&T partnered with local electricians, security contractors and plumbers for installation of devices requiring licensed contractors for installation. Digital Life handles appointment scheduling for the various contractors, Petersen said. Consumers need to be home for day of installation -- from two hours for a simple security installation to a full day for broader install, he said. Digital Life’s model as a “lower cost, pain-free way of getting it installed and being educated is key to opening this market up,” he said.

For now, AT&T isn’t trying to pull customers to its other services via Digital Life. If customers aren’t currently subscribers to AT&T Wireless or the company’s U-Verse broadband service, “that’s okay,” Petersen, adding, “Of course we'd love for you to come over.” “We're provider agnostic,” he said “and we're not asking anyone to change who they're doing business with today."

But leveraging its wireless service with Digital Life is on AT&T’s roadmap. Coming “fairly quickly” is a tie-in to location-based services, where an instruction could be written based on the location of a subscriber’s smartphone or tablet. At the outset, a Digital Life system will be programmed based on a fixed time or an action or condition in the home. When the system is tied into location-based technology, an event could kick in based on the user’s location through a cell phone. Tying into the mobile network would be easy for AT&T, he said, “and that’s an agreement we'd have to work out with other mobile providers."

Integrating functions over the platform is one of the selling points of a full-blown Digital Life system, said Christy Jones, marketing manager. She gave the example of a user being able to set up an automatic macro event using an app or on the website. If an alarm or sensor is triggered, the system can turn on selected connected lights and a radio connected to a smart plug would turn on, she said. The app, which Jones called the user interface of the system, was optimized for the iOS, Android and Microsoft Phone platforms with Blackberry in the future.

AT&T is using a “try before you buy” message for Digital Life and will demo the products and app in 450 company-owned AT&T Wireless stores at launch, Petersen said. He called it a “look, feel, touch experience” in a “non-threatening environment with an educated person on the other end.” The approach will allow consumers to “ease their way” into security and automation, he said, citing the buying process as another “pain point” for consumers who haven’t adopted a security or home automation system.” Consumers can also build a system and purchase online, he said. A one-on-one in-home consultation is available for consumers who want one, he said.

For the security portion, the Digital Life platform is housed in AT&T’s data center, which has a direct wired connection to the monitoring centers, Petersen said. In the home, no wired phone line is necessary for the security system to call monitoring centers located in Atlanta and Dallas. The UL-listed home controller, made by Cisco, connects to a 3G module communicating to AT&T’s wireless network and also connects to broadband for video, he said. The broadband connection also takes over in the case of a wireless outage, he said. Wireless security offers cost savings for customers that have only wired telephone service for security monitoring, Petersen said. Commenting on security, Petersen said the monitoring centers don’t have access to the cameras, users are required to punch in a passcode every time they access the service, he said.

Full 24-hour battery backup is required for UL certification, and that’s included in the equipment cost of a Digital Life system, Petersen said. He cited that as another cost benefit of the system versus the competition that might tack on extra charges for wireless backup, web interactivity and a warranty. “All that is in the price,” he said. “You don’t have someone walk through the home with an advertised price of ‘x’ and all of a sudden it’s ‘2x,'” he said. Customers who move will have “mover program” options when they relocate, he said.

Under the lifetime warranty, consumers call Digital Life for problems with cameras, battery or sensors, and Digital Life arranges for a service call from its Digital Handyman network through a service partnership with Sears, Petersen said. “We're leveraging their network” of thousands of licensed plumbers, HVAC specialists and electricians,” he said. For security installation Digital Life has partnered with four licensed providers nationwide and typically two in a given market, Petersen said.