1. AT&T Ventures into Home Alarm Monitoring Field
AT&T, the prime phone corporation in U.S. and one of the most famous companies in the world,
is going to begin selling home alarm services in Los Angeles and nationwide to expand its
business to seek growth outside telephones. It seems to be a tremendous challenge to ADT,
home monitoring industry head in America.
Some competitors of AT&T, including Comcast Corp. (CMCSA) and Verizon Communications Inc.
(VZ), have entered into the alleged smart-home market. And now AT&T is one of them. This move
reveals these cable and phone companies’ requirements for seeking sales margins opportunities
outside the slowing wireless-subscriber and pay TV market. ”This is a fragmentary industry.
Joining in the home monitoring market can be our best choice,” said Glenn Lurie, AT&T’s
president of emerging devices.
At the International CTIA Wireless event starts today in New Orleans, AT&T proclaimed its
services in home alarm market ahead of its debut. The service, which is called Digital Life,
provides a variety of home security and automation services that allow users to monitor their
houses remotely via their computers or cellphones. In late 2010, AT&T has obtained a smart
technology from Xanboo, a firm AT&T purchased. The central control panel links wirelessly with
residents’ lights, thermostats, cameras as well as detectors for doors, windows, smoke and
carbon monoxide. Through this panel, homeowners can then guard their households from their
mobile phones.
AT&T didn’t disclose the costs. It plans to sell the Digital Life services nationwide to anyone with a
fast Internet connection, starting with trials in the next few months in Dallas and Atlanta.
According to research firm Current Analysis Inc., Tyco International Ltd. (TYC)’s ADT unit, the
greatest home security firm in America dominates the home security market. And the Bloomberg
data reveals that Tyco’s security business had sales of $8.63 billion last year. A security and
monitoring package called Pulse from ADT charges $50 a month with a $200 installation fee. A
similar monitoring and home security package from Verizon is sold for $220 with a $10 monthly
fee. Some other home security companies charge much lower, for example, Los Angeles home
security firm offers its smart home package starting at $45.95 a month with a $49 installation
cost.
The new system can be a great leap for AT&T as well as the world marketplace. Despite the fact
that there’re a wide range of home security companies in the market, AT&T owns the advantage
of its simple user controls and technology to allow users to operate the system via the computer
or smartphones no matter where they are.
Since almost all adults in America have already had cellphones, and just 23 percent of the
households have home alarm systems, the motive for AT&T is to try to win a market profit that
still has plenty of room for growth.

2. One challenge that AT&T faces is to provide its service without sacrificing the profit margins.
According to Bloomberg data, the operating return of Tyco’s security business unit was less than
16 percent last year, and more than 24 percent for AT&T’s wireless business. Los Angeles based
AT&T is showing more ambition with its stated target of selling nationwide, rather than sticking
to its home automation and security services in Los Angeles, as Verizon does. ”We have been
evaluating this issue for a long time and it turns out that AT&T’s Digital Life doesn’t harm profit
margins,” said Lurie. “We have faith in increasing revenue with this business”.