Needed: Someone situated at the front end of the supply chain to offer perspective on how the relatively new concept of building digital amenities into production homes is faring in a softening market for new home sales. Leviton, a supplier of structured wiring products, automated lighting systems, and a wide array of other electrical gear, was a good place to look because anything digital must have electricity in order to function. Ian Hendler is both Leviton's director of product marketing for automation and a fourth-generation member of the family that owns the company (his great-grandfather founded Leviton, his grandfather is CEO, and his father is president). He also serves on the board of the Consumer Electronics Association's Tech Home Committee and is chair of the CEA's Education Committee.

“A year ago, it was, ‘What's the minimum amount of structured wiring needed for us to sell this house?'” says Hendler. “Now, they are asking about amenities that can be linked to it.”

Recent surveys, including the Parks Associates Digital Home survey done in conjunction with Hanley Wood's Digital Home magazine, and several done by various groups within the CEA, reflect increased builder interest in digital amenities. That interest level diminishes, however, among production home builders. To Hendler, this is understandable. “If you look at how hot the market has been, they'd rather just move the houses, and move on. But now,” he says, “they have to get more out of each house, and a lot of builders are paying a lot more attention to what they can put in to help sell the house.” He adds, “In terms of technology, overall what has been in the custom environment, we are now seeing in the production environment. Structured wiring has certainly become very prevalent, and that has given us a backbone for other technology.”

Leviton, based in Great Neck, N.Y., is privately held and does not disclose financials or sales figures. All Hendler will allow on the subject is that sales are growing (see accompanying chart). The company introduced its first bundled home technology packages in April under what it calls its “Build on the Possibilities” program in which it provides turnkey, simplified systems for structured cabling, multi-room audio, home theater audio (the latter two in partnership with JBL and Harman Kardon), multi-media entertainment, energy efficiency, power quality, lighting, and security. Although the program is just getting underway, Hendler reported that home theaters appear to be the hottest ticket—and the entry point for other technological amenities. “What people really want is [a] built-in home theater,” Hendler says. One reason is that “they're getting it financed through Uncle Sam in their mortgage.” But another is the desire, particularly among women, to enjoy high-quality video and audio without the clutter of wires and gear associated with systems purchased at retail.

The home theater, he says, leads home buyers into lighting: “You now have a great audio system, a great video system, and now you want the lighting to go with that.” The key to both the entertainment and lighting systems has to be simplicity of operation, he says. The lighting system can range from a simple dimmer to synchronized dim rates among interconnected devices.

Other areas of growth include the multiple-dwelling unit market—“Amenities are even more important when you have lesser space. You're paying top dollar for that real estate, and you want all the amenities in that space”—and also in remote access systems, which allows a homeowner to control lighting, security, HVAC, and other systems from a remote computer or cell-phone. Another market that is red hot right now is energy efficiency, particularly in California, where builders are operating under Title 24, which imposes limits on energy usage in new construction. This has set off a boom in sales of occupancy sensors that will turn off lights when a person leaves a room.

Hendler, then, could be called bullish on the market for digital home technology.

Key Data One company finds a new market for built-in digital amenities.

  • All sizes of Leviton Structured Wiring Enclosures grew 30 percent between 2004 and 2005.
  • Electronics in enclosures (Leviton ‘modules') Voice (Telephone/PBX), Data (Broadband Networking), Entertainment (TV/CATV/HDTV/Satellite), and Power Quality (surge protection) modules used in Leviton enclosures—grew 11 percent between 2004 and 2005.
  • Structured wiring penetration continues to grow.
  • Home owners are requesting more connectivity in their homes.