Investors fear ADT’s business could be hurt by Amazon’s foray into home security.

  • May 1, 2018

    Amazon Home Security Hurting ADT

    From bookstores to shopping malls to supermarkets, Amazon has roiled many a long-established business model.
    Now, the Amazon effect is shaking up an unlikely industry: home security systems.

    Shares in Boca Raton-based ADT, the security provider that went public in January, took a fall after Amazon in February announced its $1 billion acquisition of Ring, a maker of systems that connect doorbells with security cameras. Ring lets homeowners view security footage from their mobile devices.

    Amazon’s move opens the possibility of the Seattle giant disrupting the new market for do-it-yourself home security, a fast-growing category that threatens to squeeze ADT and its long-established model of installing elaborate systems and insisting on three-year contracts.

    Amazon’s move into home monitoring fits nicely with its new service that lets customers unlock their doors for deliveries or for services such as cleaning.

    “They have all the infrastructure of the cloud and the security cameras, so it just makes sense,” said Tyler Vernon, chief executive of Biltmore Capital, a money manager in Boca Raton.

    Then there’s the matter of the cost and inconvenience of home security systems. According to Consumer Reports, signing up for service with ADT would cost $2,425 over five years, including $925 for hardware. Do-it-yourself systems are significantly less expensive, costing as little as $620 for hardware to cover 15 windows and two doors, and nothing for monitoring.

    Venture capitalist Jason Calcanis appeared on CNBC recently to predict ADT will be hit hard by the move to cheaper do-it-yourself security service.

    “The big loser in this will be ADT and those kind of folks,” Calcanis said. “People absolutely hate that company.”

    Investors have taken note. On the day of ADT’s initial public offering in January, shares traded as high as $12.97. After hitting $13 in February, ADT stock has headed down, falling as low as $7.55 this month.

    Shares bounced back to $9.06 as of April 24, but ADT still is off 27 percent for the year.

    Amazon isn’t the only tech company eyeing ADT’s market. Google owns the home-technology company Nest, which is pushing cheaper alternatives to traditional security monitoring.

    In a March conference call, ADT Chief Executive Tim Whall acknowledged new competition from tech giants.

    “Now you see Google Nest coming out there with products,” Whall said. “You see Amazon, potentially Apple.”

    Whall put an optimistic spin on the rise of cheaper options. Low-cost do-it-yourself security might spur more renters and homeowners to invest in surveillance cameras, he said. And that entry-level investment might spur consumers to pay for professional monitoring, rather than skipping security altogether.

    “I think this is positive,” Whall said. “For years, we’ve talked about driving penetration rates past 20 percent, and perhaps this is one of the things that will help us with that.”

    Read the full article here:

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>



1256 contracts, 2010, 401K, adp report, Advisors, Alexandra Twin, alternative investments, annuity, asset allocation, asset classes, asset management, Associated Press, away, banks, Barrons Top 100, BCA, BCA. Biltmore Capital, Ben Bernanke, Best Week, bias, Biltmore, Biltmore Capital, Biltmore Capital Advisors, bond market, Brand, Brand Recognition, Business, Call, CFP Princeton, changes in market price, Chief Investment Officer, closed end funds, CNBC, CNBC Halftime Report, CNN, CNN Money, CNNMoney,, collar stock, college grads, Consumer Confidence Report, correlations, Covered, Covered Call Options, credit ratings, customized investment strategies, Dean, donald chambers, Dow Jones, dr don chambers, drop, Early, easy trading, economic policy, economy, Edge, efficiency, election, end, equilibrium, equity trading, etf, etf trading, ETFs, euro, Europe, Europe debt, European debt crisis, family office approach, federal income tax, federal investment income tax, Financial, financial advisor, financial crises, financial distress, financial management, financial security, financial strategies, Ford, Fox, Fox Business, fund manager, futures contracts, Gains, General Motors, Global, global market, Global stocks, groupon, halftime report, Herbert Lash, high income tax, home country, Home Sales, housing market, IDEAS, income tax, income taxes, initial public offering, Instant View, investment bias, investment income, investment returns, investment risk, investment strategies, Investors, IPOs, IRA, Jilian Mincer, Jonathan Cheng, KANA INAGAKI, key, large losses, long risk exposure, Los Angeles Times, make money, making investment money, making money last, Manufacture, Manufacturing, Market, market news, market price, market volatility, Markets, marketwatch, MICHELE MAATOUK, Mike Miliard, Molly Vernon, money, Money Manager, money managers, money strategy, municipal bond interest, municipal bonds, nassau club, New Jersey Advisors, New York Times, NJ, NJ advisors, NJ financial advisors, NJ money manager, NJ wealth advisor, NJ Wealth Advisors, obamacare, oil slide, Options, options strategies, Outlook, outperformance, Pending, personal financial services, personal risk analysis, Play, portfolio manager, Potfolio Manager, Princeton, Princeton Advisors, Princeton asset management, princeton financial advisors, Princeton Money Managers, Princeton wealth advisor, private wealth management, rally, recession, Recognition, registered investment advisor, Registered Investment Advisory Firm, retirement, retirement strategy, return, returns, Reuters, reward, RIA, RIA Princeton, Risk, risk exposure, riskier, rmd, Roth IRA, safer, saving taxes, savings, SEC-registered, Seeking Alpha, short risk exposure, Shudder, signals, skype, social security, social security benefits rules, star ledger, state income tax, Stephen Bernard, Stock, stock market, stock market returns, stock market winners, stock option strategies, stock price, stock prices, stock research, stock strategy, Stock Volatility, Stocks, structured notes, Stuart Day School, swine flu, tail risk, Tax Advantaged Investments, tax free investments, tax savings, tax strategy, taxes, taxes for social security, taxes on investment income, The Dean, The Wall Street Journal, Thomson, Thomson Reuters, Tick, Tim Ralph, Timothy Ralph, Today, Tony Roth, Trading, tricks, Tyler, tyler vernon, U.S., U.S. dollar gains, U.S. Stock, unemployment, USA, USA Today, VIX, volatility, Wall Street, wealth management, wealth manager, wells fargo, world market, worth, Yahoo, Yahoo Financial,