'Massive Transformation' in Lighting Business Is Growth Driver, Says Control4 Chief

Control4’s intelligent lighting, which the company revamped a year and a half ago, is driving channel expansion for the home automation company, CEO Martin Plaehn said on a webcast from the Needham Growth Conference Wednesday. Plaehn called programmable lighting a “megatrend” in the home automation market that’s going through a “massive transformation.” Citing the industry transition away from incandescent bulbs as part of the government’s energy efficiency standards, Plaehn pointed to the move to LED “or digital” lighting that will affect all U.S. households without a “pantry full” of incandescent bulbs. “All of us are going to have to move to LED,” he said, “and we’re going to have to move to adaptive-phase dimmers.” As electricians and lighting designers make the shift, “they’re going to realize that digital lighting means programmable lighting,” which Plaehn positioned as “right in the sweet spot of home automation.” More and more dealers are being certified to install Control4 lighting products, Plaehn said, and overall the company is adding 300-400 dealers per year. Chief Financial Officer Dan Strong said lighting is driving Control4’s solution business and in many cases has become “the entry point into the home as consumers want to experience smart lighting.” Plaehn referred to a “barrier of entry” that makes it difficult to enter Control4’s space, including the 8,000 devices with which Control4 works, that's taken some 10 years to amass. Strong called that library of devices one of the company’s most powerful assets that would be “very difficult to duplicate.” Expanding on his barrier to entry comment, Plaehn provided a “litmus test” of potential competitors to Control4 and said, “When could they come to your home and automate your home or some part of it?” He mentioned a “big Korean company with an S,” citing Samsung’s emergence in the smart home market, along with “another company that runs a search company,” and the “company that built all our phones,” and challenged when a Samsung, Google or Apple -- all planning big moves in the smart home space -- would be able to install a system in a customer’s home. “We’ll schedule an appointment and be there tomorrow or this afternoon or next week or at your convenience,” Plaehn said. “We deliver the connected home today.” He gave examples of a Nakamichi tape deck, a pool, a sprinkler system and an HVAC system as products that Control4 can manage today but that companies just entering the market today aren’t able to communicate with. “They can’t do it," he said. "Not for a long time.”