Average custom integration company experiences a whopping 27% median revenue jump in 2014 with bullish outlook for 2015. Dig deeper in CE Pro’s 2015 State of the Industry report.

Keep up the good work! It’s about all that can be said to the entire custom installation industry in reference to their performance in 2014. According to exclusive data from the 2014 CE Pro Annual Readership Study, the typical custom integrator had a whopping 27 percent increase in revenue in 2014. And more good fortune appears to be on the way, with dealers predicting an increase of 7.1 percent for 2015.
The research, which was conducted in October 2014 with 346 respondents, reveals that the median revenue of a CE pro grew to $821,500 in 2014. That’s up an incredible 27 percent from the 2013 median revenue number of $644,000. Moreover, the 2014 revenue level is now up a mind-blowing 51.8 percent compared to 2011 in the depths of the recession.

The 2014 gross revenues are still lower than the peak of $1.2 million in the pre-recession year of 2007. Gross revenues reflect income from all sources (both commercial and residential), including equipment, labor, service and recurring monthly revenue (RMR) sources such as security alarm monitoring and service agreements.

Home Networking, RMR on Upswing

Another trend apparent from this year’s data is the growth of the home networking category. Increasingly, home technology components are IP addressable. They rely on a strong enterprise-level home network to support streaming audio/video, security communication, web-connected thermostats, home automation and more.

Dealers recognize that any installation starts and ends with the home network. Eighty-three percent of integrators installed home networking products in 2014. That made it the most-popular product category, more prevalent than staples like in-wall/in-ceiling speakers (69 percent), HDTVs (68 percent), multiroom audio (73 percent) and hotter than other popular new categories like Ultra HDTVs (61 percent).

It’s also not surprising to see that the average integrator bought 20 percent more networking/communications equipment in 2014 ($70,415) compared to 2013 ($58,513). It was by far the largest individual product category increase, but purchases jumped in every product category in 2014 but one.

Indeed, dealers bought 11 percent more security equipment, 7 percent more home automation equipment, and 1 percent worth more home theater components (which is still the largest category, with an average of $96,763 in purchases last year.) Only audio saw a decrease in 2014 vs. 2013 and it was just a 2 percent dip. Again, that is likely reflective of the growth in less-expensive wireless multiroom audio components.

Recurring monthly revenue (RMR) is still slowly making headway among custom integrators. More than one in four (27 percent) say their RMR revenue increased in 2014. Security monitoring and service contracts lead the way, with 60 percent of custom installers offering alarm monitoring and 51 percent selling service agreements. However, both categories still represent a small portion of overall revenues for the typical company.

Meanwhile, remote managed services are growing, with about four in 10 dealers installing some sort of remote power management or full system management device from which they earn service revenue (not necessarily RMR).

Read the full article on CE Pro

Original Article Published By Jason Knott on CE Pro, January 15, 2015

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