Best Buy's ConnectedLife.Home Automates the Life of Luddites for $15,000

Best Buy has decided to make home automation easier by offering its ConnectedLife.Home package, a $15,000 box-o-fun including an HP Media Center PC controlling an Xbox 360 as a media extender, along with a dozen Insteon remote light switches, a RCS networked thermostat you can control from that PC and a couple of Panasonic surveillance cameras. It's all linked together with an AnyWire Ethernet powerline network by Corinex, and is controlled by Exceptional Innovation Lifeware home automation software.

Sure, it's $15,000, but Best Buy says it will install this entire system in your house, anywhere you are. But there are no substitutions in this package, so if you already have a home network, a PC or an Xbox 360... tough. And, they're not going to be installing those light switches, for inexplicable reasons. But something like this might be very difficult to get going on your own—especially if you're not, uh, technologically inclined.

Is this a rip, or what?


So the prospective customers of this ConnectedLife.Home package don't have an Ethernet network in their house? Obviously, this system is not aimed at the geeksters. Perhaps that's why Best Buy sees fit to charge $15,000 for $10,000 worth of equipment. You think that's steep? Try getting an installer to put in a Crestron/AMX system in your house: that'll be $50K please. This racket is along the same lines as Best Buy's high-margin practice of charging $75 for a $12 HDMI cable. There is an asymmetry of information here, where the uninitiated fall prey to those with a little bit of knowledge and a big-box store.

The home automation business is the stomping ground of a special breed of professional installer, people who are in business for themselves and pray upon the technophobe with lots of disposable income. As soon as you say the words "home automation," the price tags spiral into the realm of the absurd. One telltale sign you're about to be fleeced: these companies never call the place where you're living a "house," it's always referred to as your "home," which has a warmer sound and seems to get people to want to spend more money. Expect the words "family" and "children" to be used a lot, too.

You'll also notice that it's nearly impossible to find the prices of the individual items in this special ConnectedLife.Home package. That's because many of the components are sold and marketed within the realm of the professional installers, who buy this gear wholesale from suppliers and then mark it up to a price this well-heeled market will bear. For instance, Lifeware home automation software and its associated equipment is commonly quoted at around $2 per square foot. This means that commonly-available LCD panels, a bit of home automation software and everyday networking technology is fattened up with margins not seen anywhere this side of a Rolls-Royce dealer.

Since the home automation industry is in its infancy, there are no economies of scale to bring prices down, nor is there much competition between these clubby companies. It's similar to the situation in the home theater industry (which is now just starting to loosen up a bit) where as soon as you utter the words "home theater," prices are suddenly quadrupled.

To be fair, putting this stuff together and making it all work is quite difficult, and in many instances, impossible. The installers bring expertise that very few people possess in integrating home automation equipment. None of it is anywhere near what could be remotely called plug-and-play. Sure, Best Buy's $15,000 price tag sounds like a lot, but it's a step in the right direction—quite a bit better than the $50,000 you'd pay for a Crestron system.

Those bonanza days for these installers are numbered, however. I'm thinking that as soon as all this technology is completely wireless and plug-and-play, all that will be left for installers to do will be to mount a few panels on the wall, the equivalent of hanging a picture frame. And who needs an installer for that?

Best Buy, Exceptional Innovation and ConnectedLife.Home [CEPro]