Julie Jacobson from CE Pro\'s presentation on 11-18-10 Weekly GrandCare Aging/Technology Webinar! Great work Julie!

1. © 2010 EH PUBLISHING
Home Technology Integrators
Understanding the Channel
Julie Jacobson
Editor, Co-Founder CE Pro/EH Publishing
www.cepro.com
www.ehxweb.com
juliejacobson@comcast.net
@juliejacobson

2. © 2010 EH PUBLISHING
About Us
• CE Pro www.cepro.com
– Launched 1994
– 40,000 print subscribers
– 700k pv per month CEPro.com
– Audience: Low-voltage integrators
• Custom Electronics specialists
• Security dealers
• Audio, video, other low-voltage installers
• EH Publishing www.ehpub.com
– CE Pro (trade)
– Electronic House (consumer)
– Commercial integrator
– Electronic House Expo
– Research
– Plus: Robotics, Pro Sound, Logistics

3. © 2010 EH PUBLISHING
Agenda
• The people: Understanding the CE pro
• The custom business: size, scope
• Distribution: How CE pros buy product
• CE pros and the Agetek market
• Why/how to get involved with CE pros
• Moving forward: CE pro and Agetek

4. © 2010 EH PUBLISHING
What is a CE Pro?
• Custom
– Specifies, sells, installs, integrates and services
• Electronics … specifically for the home
– Home automation
– Home theater
– Distributed audio and video
– Lighting control
– Security
– Energy management
– Remote home monitoring & management
– Home networks
– Telecom
• Professional
– High touch
– Long-term service contracts

5. © 2010 EH PUBLISHING
What is a CE Pro?
AKA…
• Custom Electronics Professional (CE Pro)
• Home Systems Integrator
• CEDIA Dealer
• Home Automation Professional
• Electronic Systems Contractor (ESC)
• Custom Installer
• A/V Specialist
• Low-Voltage Guy
• Home Technology Integrator
• D/I (Dealer/Installer)
• CI (Custom Installer)

6. © 2010 EH PUBLISHING
CE Pro Purchasing Power
# of firms
$ value of product
purchased
"Market Size"
billed value of installations
2005 13,500 $4.8 billion $12 billion
2006 14,637 $5.3 billion $13.5 billion
2008 13,173 $6.3 billion $15.7 billion
2009 12,119 $5.5 billion $13.7 billion
Source: © EH Publishing
2010 Custom Electronics Installation Business Survey (CEIB)
www.cedataonline.com

7. © 2010 EH PUBLISHING
Company Revenues 2010e
Revenues 2010e % Integrators
< $250k 30%
$250k - $500k 18%
$500k - $1M 15%
$1M - $2.5M 20%
$2.5M - $5M 10%
$5M - $10M 4%
> $10M 3%
MEDIAN $567,000
AVERAGE $1,602,500
Source: © EH Publishing CEIB 2010

8. © 2010 EH PUBLISHING
Typical Job Size & Volume
2010e 2011e
MEDIAN 25 35
AVERAGE 95 114
2010e 2011e
MEDIAN $15,000 $17,500
AVERAGE $26,676 $34,631
Revenue Per Installation
Number of Installations
Source: © EH Publishing CEIB 2010

9. © 2010 EH PUBLISHING
Reach
Dedicated CE pros touch more than
1.3 million homes per year
---
Larger community touches 5 million+
---
Very long term relationships
Customers for life
Source: © EH Publishing CEIB 2010

10. © 2010 EH PUBLISHING
Business Sectors
• High-end integrators [2,000- 3,000 dealers]
– Low-volume, high-cost installations
– 5-20 homes/year
– $50,000+ installations
– Install : highly integrated, all subsystems, extensive home theaters
• Mainstream integrators [8,000 – 12,000 dealers]
– 40-200 homes/year
– $8k - $40k installations
– Install: “mass customization”, all subsystems; modest theaters
• High-volume integrators [2,000 – 3,000 dealers]
– 300 – 1,000+ homes/year
– $2k - $10k installations
– Install: infrastructure wiring, security, distributed audio, lighting control, energy
management, surround sound systems
Shift expected due to ADT, others entering home control business
Source: © EH Publishing

11. © 2010 EH PUBLISHING
Business Sectors
• Home theater specialists [1,000 – 2,000 dealers]
– 5 – 25 homes/year
– $10k - $1,00,000+
– Install types: Mostly single-room theaters, from fairly modest to ultra-high end
• High-volume specialists [50,000-75,000 dealers]
– Single area of expertise but other low-voltage attachments
– Security dealers
– Electrical Contractors
– AV Retail
– IT
Source: © EH Publishing

12. © 2010 EH PUBLISHING
What CE Pros Install
Source: CE Pro Reader Survey, 2006
34%
46%
70%
44%
61%
51%
58%
74%
74%
75%
27%
46%
46%
72%
76%
65%
71%
77%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Central Vacuum Systems
HVAC Controls
Home Automation Systems
Burglar & Fire Alarms
CCTV
Computers and Monitors
Telephone Systems
Netw ork Hubs/Routers
Wireless Netw orking
Structured Wiring Systems
In-House Gaming Systems
Home Theater Furniture/Seating
Satellite TV Systems
Home Theater Receivers
Flat Panel Displays
Audio Hard Drives/Media Servers
Distribution Amplifiers
In-Wall, In-Ceiling Speakers
% of Dealers That Install
Audio
Video/Theater
Networks, Telecom, IT
Security
Controls

13. © 2010 EH PUBLISHING
How they Buy
Percentage of Products Bought Through:
– Direct from Manufacturers 47%
– Distributors 42%
– Electronics/Appliance Retailers 6%
– Building/Home Supply Retailers 6%
Source: © EH Publishing

14. © 2010 EH PUBLISHING
Wholesale Channels
• National Distributors
– Multi-location
– Single location
• Regional Distributors
• Regional Distributor Groups
• Rep Distributors
• Buying Groups

15. © 2010 EH PUBLISHING
CE Pro Growth Markets
In which of the following areas will your company likely see growth in the next 12 months?
Source: © EH Publishing CEIB 2010

16. © 2010 EH PUBLISHING
CE Pros & Aging in Place
• Electronic House Expo
– 4 years with ‘Home Health Technology’ Pavilion
– First educational track for home health – 2010 [SRO]
• CE Pro magazine
– Enhanced coverage
• Wildly popular Webinars

17. © 2010 EH PUBLISHING
Why CE Pros Embrace AIP Mkt
• “Customers for life” are aging
• Demographics are there
• Resolve from government, insurance co’s
• New outlets for their existing skillset
– Customer base
– Service infrastructure
– Core tech competencies: automation, lighting,
security, communications, audio, video …
• CE Pro & EHX are relentless

18. © 2010 EH PUBLISHING
What CE Pros Do Know
• Demographics
• Government, insurance companies investing in
independent living
• PERS
• Grandcare
• Closeby Networks (Control4)
• That guy that Julie always writes about
(Jason Ray, SimplyHome)
• EHX is doing home health technology
• We gotta be in this space

19. © 2010 EH PUBLISHING
What CE Pros Need to Learn
• Who are the decision makers?
• Who pays?
– Government, insurance reimbursement
• Vertical markets
• Which trade shows to attend
• Best organizations to join
• Product choices and opportunities
• Liabilities

20. © 2010 EH PUBLISHING
Beyond Whole-House Care
• Lighting for the elderly
• Single-purpose devices
– PC-free email
– senior-friendly computers
– Communications/videocon
• Music

21. © 2010 EH PUBLISHING
Who are the Players & Payers
• Consumers themselves
• Caretakers – family
• Caretakers – professionals
– Visiting Angels, Comfort Keepers, Family Caregiver
Alliance, Geriatric Care Managers
• Homeowners’ Associations (HOA)
• MDUs & other master-planned communities (55+ active
adult)
• Physician Practices
– Family medicine, psychiatriasts, gerontoligists
• Rehabilitation
• Senior Housing
– Assisted living facilities, nursing homes, continuing care
retirement communities (CCRC)
• NAHB CAPS professionals

22. © 2010 EH PUBLISHING
Why CE Pros are Good for AIP Vendors
• Touch 1.3 - 5 million+ homes/year
• CE Pros spec the products (or highly influential)
• Technical competency in key categories
• Reduce tech support burden on vendors
• High touch, customers for life
• Ensures optimal consumer experience, from
install to training the customer
• Access to and influence with homebuilders,
developers, architects, interior designers, others
• Excellent feedback for product development

23. © 2010 EH PUBLISHING
Advice to AgeTek Vendors
• Recurring Revenue?!
• Training
• Dealer programs
• Explore distribution
• Industry trade shows & associations
• Form factors: Think equipment rack &
entertainment centers

24. © 2010 EH PUBLISHING
2011 Trade Shows & Events
• CES (CE retailers)
– Jan. 6-9, Las Vegas
– Silvers Summit & Expo
– www.cesweb.org
• Electronic House Expo (CE integrators)
– March 17-19, Orlando, Fla
– Seniors Pavilion and AIP curriculum
– www.ehxweb.com
• CEDIA Expo (CE integrators)
– Sept. 7-10, Indianapolis
– www.cedia.net/expo
• ISC West (security)
– April 5-7, Las Vegas
– www.iscwest.com

25. © 2010 EH PUBLISHING
Thank You
Julie Jacobson
Editor, Co-Founder CE Pro/EH Publishing
www.cepro.com
www.ehxweb.com
juliejacobson@comcast.net
@juliejacobson