Wednesday, October 27, 2004

Home Automation Demand Rising

Amid the weak economic sentiments, the home automation market is still growing in Korea.

By Veronica Chen, Jason Tan

Ten years ago, only 10 to 20 percent of new apartments deployed home automation or video doorphone solutions, however, the numbers have increased to 80 to 90 percent now, informed Joon K. Park, general manager of Kocom Co., Ltd.

In addition to newly constructed apartments, he said, the demand of old buildings is picking up strong in a move to enhance home security.

As such, Kocom expects a positive business outlook this year and targets to increase its revenues by 25 percent over 2003.

Meanwhile, 90 percent of Hyundai Telecom’s business revenues are from the local scene as well.

“Home automation ties up with construction companies. We have good connection with the constructors in Korea. So our home automation products have been widely adopted in the domestic market,” said Steven H. Choi, director of overseas marketing and sales department.

Venturing Overseas

Hyundai started to export since 1999, and the major export items are still video and audio doorphones. The black-and-white video doorphone accounts for 85 percent of exports.

Its home automation solutions are only exported to China, Malaysia and the U.S. in a small amount.

“The biggest challenge in the overseas market is low awareness of home automation system. Still not many users understand the solution and the convenience it brings. The market is in need of education,” noted Choi.

To increase the sales volume, the company also offers CCTV products. By providing one-stop shopping services, it looks forward to bringing some leverage to its home automation products.

”To export home automation products, the ability of customization is critical. Mostly we work with security service providers in overseas markets. We are required to incorporate their systems into our home automation products,” he explained.

On the other hand, Commax Co., Ltd., which currently has 10 projects underway in Asia, is upbeat of the market outlook.

“Home automation demand is rising in the region and the business will be growing,” stressed Lee Jung Yup, international sales department general manager.

He said that with too many CCTV products in the market, vendors have to offer more choices of selection. As such, Commax is promoting the home automation solutions bundled with CCTV systems to the clients.

In his views, video doorphone market in Japan and Korea are getting saturated, but these products are catching up in the other countries, especially in the U.S. and Middle East, where the concept of video doorphone is new.

Meanwhile, Kocom will keep on penetrating China and Eastern Europe as they demonstrate increasing needs of home automation solutions.

Park claimed that with its 28-year of technical know-how, strong research-and- development team of 40 engineers, Kocom will continue to forge its good reputation in the industry.

In terms of product segments, video doorphone currently contributes 75 percent to its total revenues. Intercom accounts for 15 percent, CCTVs five percent and multimedia (including digital cameras and PC cameras) five percent

“Multimedia segment is quite a new business to us. We will focus more on the security products instead and we estimate the video doorphone sales will be getting bigger,” Park said.

To beef up its line-ups, it is slated to introduce many new models, with special designs and features next year. These include video doorphones in color and with picture memory on monitors.

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