Insteon isn’t a household name, even though its technology powers millions of home-automation devices around the world.
That could change—and just in time for the holiday shopping season—thanks to the Irvine-based company’s latest distribution agreement with Wal-Mart Stores Inc. and recent deals with Apple Inc. and Microsoft Corp.
The Wal-Mart deal provides shelf space at about 1,500 stores across the country that will carry a number of Insteon devices, ranging from motion sensors, switches, LED bulbs and indoor cameras.
The deal hikes the company’s retail to about 2,500 locations in the U.S., with big chains such as Home Depot, Radio Shack, Target, and regional home improvement chain Menards also in the mix. That’s up from 400 stores in 2012.
“If it goes well, we could scale to hundreds or thousands of stores,” said President and Chief Operating Officer Joe Gerber. “The demand of the products has increased, and the awareness of Insteon has increased.”
A distribution deal signed in June with Microsoft has grown to 52 retail stores and includes product demonstration displays at one location each in Scottsdale, Ariz., and the Washington, D.C., area.
The relationship was strengthened a month later when Insteon announced that its Windows 8.1 smartphone app would integrate Cortana, a “digital assistant” developed by Microsoft that allows users to control home appliances and other electronics through voice commands.
Insteon also has a role in Apple’s developing HomeKit platform, which is expected to allow users to control locks, lights, cameras, doors, thermostats, plugs and switches at home from a single iPhone app.
The strategic relationship with the tight-lipped Cupertino-based company could be a boon for Insteon, which Gerber said has developed a HomeKit application and related hardware.
“It’s a very important relationship,” he said, declining to discuss specifics of the deal. “This was a wonderful validation in the work that we’ve done and the work that we’re doing.”
Apple retail stores don’t carry Insteon products, but that could change with the HomeKit release.
Irvine-based Broadcom Corp. is also in line to benefit from the HomeKit launch as a primary supplier of firmware-loaded chips, which ensure product certification in Apple’s closely guarded supply chain and consumer ecosystem.
Insteon doesn’t disclose revenue, but the Business Journal estimates that parent SmartLabs Inc. has annual sales exceeding $200 million, which includes sales from its Smarthome retail store.
Smarthome shares Insteon’s headquarters on Millikan Avenue near John Wayne Airport and sells its products.
Employees, History
The company employs about 120 in Irvine and recently leased a condominium in San Francisco used for press events and demonstrations.
SmartLabs was established as an electronics catalog company in 1992 by entrepreneur Joe Dada in his Newport Beach condo.
Smarthome, launched a year later in Costa Mesa, runs one of the longest-running online stores, with more than 13,000 products that include quirky home gadgets. Most of the devices were designed to automate household electronics, including thermostats, pool filters, light switches, security systems, door locks, timers and monitoring gear.
The first outside distribution deal of its own products came in 2003 with Best Buy.
Insteon was launched in 2005 to develop a protocol for various companies’ devices to talk to each other.
It also started to manufacture products under the Insteon brand, developing products that employ dual-band technology that uses existing household power lines and radio-frequency communication rather than relying solely on spotty Wi-Fi connections and routers to power the hub.
“The brains of the automation are in the device, not in the hub,” Gerber said. “We’ve been doing this for so many years, we’ve learned what works and what doesn’t.”
Projections
Insteon was an early entry in what’s now referred to as the Internet of Things market, a red-hot segment that is expected to explode to $7.1 trillion in global sales from related components and equipment by 2020, up 273% from last year, according to Massachusetts-based market researcher International Data Corp.
By then, according to Morgan Stanley, it’s expected that about 75 billion products—ranging from washing machines to lighting systems and personal health sensors—will be connected to the Internet.
“There has been this grand, focused spotlight on home automation, and that rising tide has lifted us and everybody else,” Insteon’s Gerber said. “Our lives are connected socially. Why not connect all the things in your house?”
