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Verizon initially launched its smart-home service, Verizon Home Monitoring and Control, in October 2011. FiOS customers could subscribe to the service to control security cameras, lighting, door locks, and thermostats via FiOS TV remote controls, a mobile app, and a website. Verizon decided to stop selling the service in October 2013 but continued to service existing customers, indicating that it was revisiting the idea of the smart home to evolve its offering in line with technological developments and consumer expectations. In June 2015, Verizon stopped servicing existing customers and encouraged them to migrate to Nexia Home Intelligence. Now that Verizon has severed all ties with its smart-home customers, a relaunch of any kind is in question.

Nearly two years after shelving smart-home product, Verizon migrates customers to Nexia

Among the telecoms and cable providers that offer smart-home products and services, Verizon was relatively early to market. Rival AT&T did not launch Digital Life until April 2013, with Verizon having launched its Home Monitoring and Control product in October 2011. In this case, being an early mover wasn’t advantageous. A smart-home service can be a tough sell to begin with, and some companies who launched after Verizon had, perhaps, more successful business models.

Verizon required Home Monitoring and Control customers to be FiOS customers. In contrast, AT&T does not require Digital Life customers to be AT&T U-Verse (wireline) or wireless customers. AT&T also launched with a more sophisticated and professional home-security service, to appeal to the existing home-security market in the US and compete with home-security giant ADT, whereas Verizon’s solution was simpler and did not have the appeal or ability to compete with ADT and other professional services. Verizon had to go after users that weren’t interested in a home-security alarm, which is a harder sell.

When Verizon stopped accepting new customers for its smart-home service, the company indicated that it was going to revisit the service because technology and consumer expectations had evolved. Verizon wanted its product to more accurately reflect what consumers want and what the company’s own vision of the smart home has become.

However, since Verizon stopped accepting new customers it has announced little on this topic. And in June, it stopped supporting the Home Monitoring and Control service.

Verizon directed remaining customers who wanted to maintain the Home Monitoring and Control service to Nexia Home Intelligence. Verizon made arrangements with Nexia to provide a migration to the Nexia service at the same subscription price as was offered through Verizon. Customers who did not transfer to Nexia by June 20 had their service shut off on that date.

With this move, it looks like Verizon is either not planning to re-enter the smart-home sector any time soon or is planning to do so with a completely clean slate. In March, Verizon hired Ohad Zeira, who was formerly the head of Belkin’s WeMo home-automation product line, to oversee smartphone and home-automation efforts. (Verizon currently sells Belkin and other brands of home-automation devices in its “accessories” section for Verizon Wireless customers.) This piece of news indicates that Verizon’s re-entry into the smart-home market can’t be counted out just yet.

Ovum future view

If Verizon does come out with a second-generation smart-home offering, it is likely to look more like AT&T’s Digital Life, i.e. based on 3G or 4G and fixed broadband and available to an audience broader than its own subscriber base.

Verizon would face challenges if it were to launch a second-generation smart-home product, notably a decision whether to go after the professional home-security market or do something different. If Verizon does not go after the home-security market, it will have to make a business case for smart-home service beyond security. Convincing consumers to pay for a variety of smart-home automation features at a time when some households are trimming services – most notably cutting the cords of traditional pay-TV services – could be a challenge, and one that is industry-wide.

Despite these challenges, Verizon should still introduce a second-generation smart-home offering. With peers such as AT&T, Comcast, Cox, and Time Warner in the market, such a move is necessary from a competitive standpoint. In addition, the service offers an additional revenue stream and, when bundled with other services, creates stickiness and reduces churn. However, before Verizon can re-enter the smart-home space, it needs to build a strategy to determine its ideal positioning within the smart-home segment: Will it enter the professional home-security market or aim for something else?


Further reading

“Monetization remains the big issue in the smart home industry,” TE0003-000858 (June 2015)

Smart Home: The Broadband Service Provider Opportunity, TE0003-000801 (November 2014)

“Industry needs to create value for all segments if the smart home is to reach mass-market success,” TE0003-000773 (July 2014)


Kristin Paulin, Senior Analyst, North & South America

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