DATA RELEASED EARLIER THIS YEAR BY Parks Associates—a research firm that focuses on technology for the digital home—provides evidence that home builders may finally become a much more important channel for selling home-technology products.
Based on its 2004 Builder Survey of more than 400 builders, Parks Associates found that home builders sold $11 billion worth of technology products in 2004, with sales expected to increase from 10 percent to 12 percent in 2005. The sales number includes home theaters, speakers, structured wiring, and home control systems.
Bill Ablondi, homes systems specialist for Parks Associates, says builders have become much more proactive about promoting home technology, adding that about 25 percent of the home builders surveyed have employees actively evaluating new technologies for their potential to boost sales and serve as differentiators.
The study, which was released to the general public in late August, also found that home builders make sizable profit margins on home-technology products. For structured wiring, the average margin is 22 percent; for dedicated home theater, 18 percent; multiroom audio, 18 percent; and security systems, 15 percent.
Ablondi says there's still a lot of room for builders to form partnerships with dealers and home-technology integrators. For example, only 23 percent of the builders surveyed have local security dealers talk with home buyers, and only 30 percent have buyers meet with local audio/video dealers for multiroom audio.
“There's no question that if home builders formed closer ties, they could sell more upgrades,” says Ablondi.
For more information on the 2004 Builder Survey, go to www.parksassociates.com.