The convergence of technology is apparent in the world of residential and small commercial intrusion alarms. Today’s residential intrusion often features video — especially in the SimpliSafe era. It can even be the basis or starting-point for the smart home. End users have time and time again shown that they are interested in an integrated whole, a single-pane-of glass. Intrusion alarms continue to be an integral part of that smart home whole that includes most commonly security, video, automation, energy management, and lifestyle integration.

While political unrest and supply chain concerns around tariffs have potentially hindered the market for some, others experienced growth in the intrusion market. But overall, intrusion seemed to hold relatively steady, with those rating the intrusion market in 2024 as good to excellent tipping down slightly by 4 percentage points over 2023, according to the 2025 SDM Industry Forecast, published in January. Those rating the smart home market in 2024, however, rated it 5 percentage points higher than the previous year.

Ahead, the experts in intrusion, smart home and monitoring — both manufacturers and integrators — provide specific insights into the state of the market, the present opportunities and challenges, and the future of these segments amid tariffs and AI.

Mostly Steady Performance

On the security dealer side, John Loud, president, LOUD Security System Inc., Kennesaw, Ga., says, “2024 probably ended up more as a flat year — Not as good as we've typically had, but in talking to many other dealers, we’ve heard similar scenarios.”

Loud, who is featured on this month’s cover, points to interest rates, inflation and political unease as factors that led to this. “It was almost as if everybody held their breath,” he says. “The phone didn’t ring for cancellations either. People weren’t buying, selling, cancelling, moving forward. Interest rates are a factor. Then there’s the fight going on politically in the U.S. — all of that angst and uneasiness I think has led folks to feel like they don’t have that comfort and security and peace of mind.”

Zane Crouch, director of sales and marketing, Ener-Tel Services, San Angelo, Texas, says his company experienced a similar 2024. “During the first two quarters of 2024, we fared well, keeping pace with the prior year,” he says. “We did see a moderate decline in demand during the remainder of the year — we do see this as typical in a major election cycle across all areas of our business. The uncertainty of an unknown outcome tends to have consumers hold out on making decisions that involve financial commitments. With inflation and higher interest rates, we also recognized that many families saw a lack of disposable incomes and those that do have more disposable incomes were taking advantage of higher interest rate returns on savings investments.”

Some dealers did note a year of growth, like Chris Oram, service department manager, Eagle Sentry, Las Vegas. “Las Vegas continues to grow in the ultra-luxury category,” he says. “Since COVID, there has been a large influx of individuals coming from California. For the ultra-luxury segment, smart home elements are a requirement for the $3 million plus category. Without a control system in the home, buyers may not see the property as a right fit.”

On the manufacturing side, Resideo also noted a steady pace last year. “2024 held steady for Resideo in the intrusion/smart home space,” says Ryan Park, senior product director of safety and security, Resideo, Scottsdale, Ariz. “There was excitement as we rounded out our camera offerings with the introduction of a new indoor camera, as well as the announcement of our new hybrid series in the fall, which has positioned our dealers for future success.”

Jon Adams, vice president of sales, DMP, Springfield, Mo., says, “We did really well in [2024]. It was a year of growth for us on the residential side.” As for factors that led to a strong year for DMP, Adams says he believes it took a certain amount of time for the market to get comfortable with cameras at a residence, specifically inside one.

“It also took some time for our part of the industry to be able to make those cameras affordable,” he says. “I think to be honest that SimpliSafe and some of those [DIY companies] might have done us a little bit of a favor — they’re the ones that introduced residential cameras largely into the market.”

Adams also noted American politics as being an influence on the market, but potentially a positive one. “The other thing is, anytime you see any sort of unease — instability in the economy, or an uptick in crime — people do start to identify ways that they can feel safer, and I think video cameras provide that.”

NAPCO has also found traction with the release of some new products aimed at the residential intrusion/smart home market. “NAPCO has seen growth with our new self-contained smart home/security/video panels,” says Judy Jones, vice president of marketing, NAPCO, Security Technologies, Amityville, N.Y., “We’ve also added new accessories to fill out the line, including a second keypad/touchscreen and wireless Wi-Fi extender most recently.”

Jones says she does see a more stagnant state of the residential intrusion market. “Industry-wide the residential market has been seen as largely flat over the last couple of years, due to a downturn in traditional new housing starts, peoples’ hesitance to move and/or leave/replace low mortgage rates, etc..”

On the purely smart home side, however, Avi Rosenthal, chairman of Z-Wave Alliance, and managing partner, BlueConnect Partners, Ashburn, Va., says, “2024 was definitely better than 2023. If I look at it from a Z-Wave angle, 2024 was definitely a record year for us. We added a bunch of members; there were a whole bunch of new initiatives that came out; Z-Wave long range came into its own. And then if I look at it from a general business perspective — the business grew; the opportunities grew; the market grew. I think people are really starting to take a hold of the whole concept of intelligent living.”

Rosenthal continues, “We’ve been talking about this for a very long time, but we’re finally at the point where people understand when we say that these systems can help them live better lives — increasing both the convenience and safety of their homes. It’s no longer selling them on the concepts; it’s selling them on the solutions. It’s really developing the solutions and products that solve their problems. That has really at the end of the day helped the business grow. It’s not about buying an alarm system. It’s about buying a home system: ‘I’m paying per month because I believe in what the system can do for me and my family.’”

Rosenthal says COVID was the turning-point for the smart home system. “There was a moment at which people started to realize this wasn’t just gadgety, but that this was real life,” he says. “We built on that in 2024. We had a big surge during COVID. Everybody was stuck at home, so they wanted home control systems and home theater systems, so they did some really cool things with their homes because they were stuck at home. In 2022 and 2023 we were coming off of that high.

“In 2024, we’re now reminding people how cool it is to have this stuff in their homes,” Rosenthal adds. “From a Z-Wave perspective, the COVID period showed a lot of companies how important it was to develop new products. And so after we got through the supply chain nightmares, 2024 was the year that we got back to engineering. We got back to developing and designing cool new stuff.”

What’s Driving Intrusion & Smart Home?

With all of that context for the year prior, how is 2025 fairing for the residential intrusion and smart home industry? And what is driving the market forward? One topic that will get more attention shortly is AI. Especially as residential intrusion alarms have expanded to incorporate video, analytics are redefining the market.

“As people are adopting video and we’re able to put analytics on small boxes, it’s video as intrusion that is really driving it,” Adams says. “It’s going to be the next big thing over the next five to 10 years.”

Speaking to what DMP is doing in 2025, he adds, “In late 2023, we introduced a gateway that can be connected to our alarm systems and any cameras that are installed there. You don’t have to buy the cameras from us, but it takes those cameras, even ones that don’t have analytics and they get fed over a network that has analytics like human detection, etc … which means they have a single app that they can manage security, video and the analytics service. So it takes that otherwise not smart camera, and brings full analytics into it all on one app.

“We’re aiming for false alarms,” Adams says. “That’s another thing that's helped us drive it is people are used to door contacts and motion detectors, which — while highly used in our industry — are part of the false alarm problem because they just see motion. The cameras don’t know what it is. But now I can take these cameras and now they’re only setting off an alarm when they really see a human, as opposed to a balloon blew in front of it, a plant fell over, my cat jumped high enough that it set the alarm off, etc. We’ve seen significant false alarm reduction, and so have our dealers that have adopted it.”

Park also cited the integration of video, intrusion and smart home technology as a current driver. “The main business drivers in the intrusion and smart home space include the increasing consumer demand for connected and integrated home solutions, advancements in AI enhancing device capabilities and a growing emphasis on energy efficiency and sustainability,” he says. “From a security perspective, video is a critical component of a security or overall intrusion system for the foreseeable future.”

Beyond the appeal of technology, Rosenthal expects the political unrest and tariff concerns to continue into the rest of 2025. “I think people are going hunker down again,” he says. “I think we’re going to have a little bit of the feeling — like during the pandemic — where we want to make our homes safe spaces. ... That’s going to be very important to them because whenever there’s chaos in the world, people look to family, they look to friends, they look to their internal spaces to create sanctuary. I believe the driving forces here are going to be just that — safety, security, convenience.”

Rosenthal also stresses the energy saving aspect of the smart home experience — as did many others. “I think energy savings is still underrated in our business,” he says. “I don’t think we take enough advantage of the ability for our systems to provide energy management. I look at the rest of the world and they take energy management much more seriously than we do in our homes.”

Even more underutilized is water detection, Loud says. “To me, it’s about water detection, notification, and shut off,” he says. “Alarm industry folks need to start talking a lot more about water detection. Even though we do talk about life safety, smoke and carbon monoxide detectors, and certainly burglary alarms, you’ve only got a certain level of market penetration with that. I’ve gone before a cop county chamber of commerce here a few years in a row, and I’ve asked how many people in the room have ever had a friend, a family member, a neighbor that have had a burglary or a fire and they had an alarm system and a bunch of hands go up. Then, I ask how many have had a friend, family member, neighbor, that have had water damage in the home — from the washing machine, the water heater, the dishwasher, the faucet, the tub, the sink? Four times the amount of hands go up.”

Park also notes that leak detection is an increasingly common request for connected devices. “The most popular connected devices today include smart thermostats, security cameras and a variety of environmental monitoring systems like water leak detectors,” he says. “Over the past year, we’ve seen increased integration of these devices into cohesive smart home ecosystems.”

Jones points to specific verticals that are driving the residential intrusion alarm market. “For NAPCO we’d cite the two latest drivers in the business today as the escalating growth of MDUs (multi-dwelling-units) and new DIY ship/install consumers,” she says. “In stark contrast to the aforementioned reduction in traditional new housing starts, multi-tenant residential units/multi-family /MDUs are quickly outstripping availability throughout the country. NAPCO and its dealers see the demand for an MDU security solution, largely coming from two market groups — baby-boomer/retirees who are downsizing, shedding large home maintenance to instead enjoy gated security, tech and video in a community setting; and the first-time home-buying millennials and Gen Z-ers who are attracted by smart home amenities, video and remote-in smart home tech.”

Jones continues, “We’ve found these two new consumer groups are indeed a potentially lucrative market for our dealers in particular, because self-contained touchscreen panels make the multi-family sale easier, as there is nothing to prewire or preprogram. It’s simply plugged in after the sale and ready at the time of occupancy. It is also multilingual in both spoken voice prompts and on-screen language, so it appeals to a broad market. And finally, it’s portable for young subscribers, couples, and tenants on the move.

“Last but not least, the third driver — applicable to any traditional alarm system — is addressing the need for security system communication upgrades, migrating millions of existing alarm systems off retired and disappearing copper landline alarm reporting, to fast, secure cellular alarm communications. Recently, we’ve expanded that lineup with our broadest cellular-network-inclusive comm. product, supporting and auto-selecting the best of three carriers onsite (Verizon, AT&T or T-Mobile),” Jones says.

The Tech That’s Transforming the Market

Of course, AI is the top tech trend in the market. It’s not on the horizon, or in the future, but already here and greatly improving threat detection and ultimately safety and security for end users. “So what we sell has changed how we sell,” Loud says. “The residential video space loves the ADTs and SimpliSafes because they’re out there doing so much marketing. There are folks out there that don’t want to do it themselves or they don’t want to be with a massive conglomerate. They want to do it with someone local.”

That free marketing means more people who are exposed to the idea that predictive AI can be deployed in their home intrusion/smart home system. “My point of that is that even SimpliSafe is talking about proactive video monitoring at the home, which obviously is going to help us tremendously for false alarm reductions, our relationships with local police stations and alarm ordinances and those factors,” Loud says. “But when you see the residential space with video and AI investments and advancements, we’re all going to benefit and that’s clear. When you look at that crystal ball to see 5-10 years down the road, what we’re doing for installations today is going to look so transformationally different and it’s going to be completely video-based.”

Anecdotally, Loud says, “Several years ago when all of a sudden the Ring doorbell came out, I thought, ‘Who in the world needs a [video] doorbell? Nobody is going to ring somebody’s doorbell.’ Well then guess what? Amazon. You talk about an amazing time. When I was a kid — I’m 58 years old — you could go knock on the neighbor’s door and ask if Johnny could come out and play. Whereas that wasn’t happening when Ring came around. People would call to ask if Johnny could come out.”

Jones says, “AI is surely the most promising of technologies being incorporated in security today (and possibly everywhere). It is already used in NAPCO’s doorbells to differentiate humans from moving leaves to avoid unwarranted activation, as an example. AI is also frequently used in central stations and call centers to speed the help processes; it is used in predictive analysis and facial recognition to enhance safety measures; and AI-enabled forensic search capabilities can be used to help identify and investigate suspicious activity and/or detect the presence of gunfire. The areas in physical security where artificial intelligence can be incorporated — to help verify, enhance, and improve upon security technologies — are too numerous to list or even realize, as the technology continues to evolve and grow daily.”

AI is able to differentiate more than just motion and detect if the alarm was triggered by a person — or a known person — and it can detect if the alarm was triggered by a vehicle — or a known vehicle. “There are certain states where you can’t do this, but I think that you’re going to see facial recognition continue to grow on the residential side, to identify who can and can’t enter,” Adams says. “We’re always looking for a way to let in someone that needs to come work at our house without us having to give them a code. But we also don’t want to set the alarm off. So can I approve this person through the system seeing their face? I’ve seen some solutions we’ve looked at that allow me to say that a person is allowed to be there these hours of the day. I know that we’re seeing a lot of notifications built around AI that can recognize vehicles. The AI can recognize a postal truck or an Amazon Prime truck. I don’t need a notification every time a human is detected right after an Amazon truck pulls up.

Adams continues, “Or the exact opposite: I do want to know about it. I’m waiting on a package. I want to know when Amazon shows up. I personally get more excited about Amazon than I do the postal service, so maybe I would say ignore the mailman, but show me the Amazon guy. I shouldn’t be excited, it just means that money got spent. But more importantly, how can we merge security into their lifestyle without it being an inconvenience? That’s what I think AI is going to unlock.”

Oram says Eagle Sentry has partnered with Alarm.com to incorporate AI into its security/smart home offerings. “For many years AV and protection systems were the most common connected devices in a home. In the last 5-10 years, we have seen the lighting and shades connectivity go through the roof. In the last year, we have begun our venture into AI. Alarm.com has many amazing AI-related commands. The AI commands help our clients remember to arm their systems and learn about their lifestyle patterns and schedule to help them engage with their technology.”

Rosenthal also sees AI and its predictive nature as a transformative force in the market. “The big change that we’re going to see in security and smart home really boils down to this idea of interpreting data — understanding data, and then giving actionable responses to the data. I hate to sound like everybody else, because AI is everywhere and it’s eating the world and yada, yada, yada. I don’t want to give you a false impression, but I do think that we’ve always been really good at collecting data. We’ve never been really good at interpreting that data or responding actionably based on that data.”

Rosenthal adds, “That’s the thing that’s going to change. We're going to be just as good at collecting the data as we ever have been, but now we’ll be able to do something about it. We’re going to go from reactive to proactive in the next couple of years. That’s the most exciting thing that we can talk about — this concept of moving to a home that is intelligent enough to understand what’s happening in it. That’s revolutionary. That’s what we’ve been promising for 30 years.

“We understand now that other elements of the home can also enhance sleep — the lighting, the sound, the temperature all play into somebody’s sleep,” Rosenthal continues. “We’re finally getting to the point where the smart home is intelligent enough to understand all of these things together and it’s able to be proactive. It learns and it starts to understand. It knows that if I come home every day at 6:00 P.M. and I like to listen to The Beatles, it’s going to proactively put that on for me. I know that’s a simple thing, but it gets much more complicated. It starts to get much more sophisticated when you start to think about who’s in the home and when they’re in the home.”

This bleeds into the security applications of a truly smart, interconnected system, Rosenthal concludes. “How many people are in the home? Did the kids arrive with friends or did the kids arrive from school alone? Are the kids sitting quietly in their rooms doing their homework like I told them to? Or are they running around in the basement in the gaming room? Understanding those insights and understanding the data that these systems are collecting will now enable us to make intuitive decisions instead of just being reactive as in, ‘There’s motion in this room, turn on a light.’ That almost sounds pedestrian to me now.”

Overcoming Headwinds

The residential intrusion and smart home markets are not without challenges. While DIY companies may be providing free marketing for the technology, they’re not providing free marketing for your company. “While the big-media spends of DIY companies were initially seen as a threat to traditional security dealers’ business; in fact, they actually helped grow the security business market/consumer adoption at large.” Jones says. “According to Parks Associates nearly 50 percent of the residential security market is now inclusive of some DIY or Ship-Self-Install product — a camera, doorbell, system or otherwise.”

Jones continues, “As an industry, we need to be prepared to meet today’s security consumers where they live. Millennials and Gen Z grew up with do-it-yourself technology, smartphone-controls and Wi-Fi. They don’t look for security companies in yellow pages (if they even exist anymore) nor wait for service calls and take time off for installation appointments when they can just do it themselves and add the professional monitoring thereafter. Likewise, the ship-self-install business model resonates with the next-gen younger security dealer pros, such as those taking over the business from their parents who founded the company during the latter part of the 20th century. It is also a methodology/model that became more widely adopted/acceptable during COVID, where home-visits were deemed risk-taking.”

Park mentioned the same challenge, and the importance of promoting to the end user the benefits of working with security professionals. “Key opportunities we hear from our pro security customers remain demonstrating the benefits of a pro-installed and monitored security and life safety solution to compete with DIY-monitored and installed awareness systems,” Park says. “Dealers can address these opportunities by offering value-added services and adopting advanced solutions customers are asking for.

“To overcome the challenge of the DIY offerings, dealers can leverage new AI-powered cameras with added services like intelligent video detection, automation and life-safety monitoring,” Park continues. “To stay ahead, we will continue equipping our dealers with the best technology, support and programs that highlight the value of professional installation and long-term service relationships.”

Another challenge experienced by every corner of the security market is the talent shortage. “Certainly the number one for our industry is clearly workforce, whether it’s the technicians or the sales side that is getting folks to be interested in our industry,” Loud says.

Oram agrees: “I would say our biggest threat or weakness would be finding qualified technicians,” he says. “This would also be the biggest opportunity for Eagle Sentry. Training is an area of focus for making the next generation of high-quality technicians”

And of course, another challenge that is expected to stay with the market throughout 2025 is the economic uncertainty brought on by the American political climate. Loud says, “The big down one right now without a doubt is everything to deal with the word ‘tariff.’ Especially considering so many of our products come via Mexico or through China, we haven’t even seen the full impact yet. And it’s really about what we as companies are doing to invest and to prepare and to respond.”

To prepare, Loud said his company first needed revenue flow. “As a company, we’ve grown a lot of recurring revenue organically,” he says. “We need to have some cash flow to build or to be able to take new opportunities or for the day a pandemic hits or a bad economy hits. By having access to cash, we realize that whether there’s a 10, 25 or 35 percent increase due to tariffs or the ripple effects, that tariff will be higher to us. Even if that goes away two weeks or two months later, and they go from that 25 percent tariff quote and then it goes away to zero, I think it’s probably very likely that they’re not going to go back to zero on that tariff because they’ve had to absorb a lot of cost. So for us, we’ve started with many of our partners to purchase some inventory to be able to give us some sustainability in the long run.”

Loud says, “My take on that again is with employee retention as the number one focus. If all of a sudden my marketplace starts to have to go up on prices to keep up with tariffs, I’m still able to get jobs because I don’t have to raise my prices yet, which means my employees are still going to be employed. An investment back into the people, into your inventory, into the community is what keeps a company viable in the long run.”

On the manufacturing side, Jones says NAPCO sees the economy as a challenge for the market. “Uncertainty in the economy is a real concern right now, and tariffs are adding to the turbulence by causing price swings and raising real fears about higher equipment costs,” she says. “Another is the industry’s long-term labor shortage, historically representing a potentially large issue for many years now. Not to sound glib, but fortunately for NAPCO dealers, NAPCO’s self-contained product is designed to be an ideal solution to both issues, as its equipment and accessories are designed to be lower cost and are simple to install. The solution also demands less of the installer with built-in installation videos, sensor by sensor, plus step-by-step multilingual spoken voice prompts for setup, too.”

Rosenthal also expects the smart home market to feel the effects of tariffs. “With all the tariff talk and everything, people are not sure what to order, how much to order, or where to order it from,” he says. “We’re probably in for some short term pain until all of this sorts itself out. I don't think it’s going to be a surprise to anybody. Things are a little chaotic out there at the moment. We are dealing with a situation that’s completely beyond our control. That presents some challenges. When we’re presented with challenges, we have to rise to the occasion.”

Opportunities Ahead

Amid the chaos and concern, the intrusion market is predicted to hold steady as is the smart home market. Jones says that the economic uncertainty — as a few others have also attested to — can also lead folks to want to increase the feeling of safety and security. “While economic challenges can unfortunately lead to higher crime rates, they also tend to drive greater demand for security solutions for smarter tech to protect people and their property,” she says.

Loud says there’s an opportunity for installing — as AVS-01 has become a standard — more modern, compliant systems, “There’s an opportunity when the security dealer installation companies start to realize AVS-01 is now a standard. It is being adopted by many of the major monitoring facilities — many of the major jurisdictional communities across the nation. They catch the wave and understand it better, and then they start to educate the consumer and their sales team. They can take a look and say, ‘Here’s what these validation scores can look like.”

Rosenthal goes back to the opportunities presented by predictive AI. “The biggest opportunity for dealers is to dig in and lean in to this idea that there are other services and other benefits that they can provide to their homeowners to create real stickiness with their contracts,” he says. “And they’re not taking advantage of them as often as they should be. The value to your homeowners is in that data. How much energy did I use? How many times does the door open? How many times did the kids go in and out? How many times did the garage door get left open? What was the temperature outside versus the temperature inside? What was the differential? We collect all that data."

Rosenthal continues, “Because we don’t provide it to the homeowner, we don’t remain in constant communication with the homeowner, and they forget why we’re so valuable, until an event happens like someone’s home gets broken into in the neighborhood to remind them. You need to remind them every month why you’re an important part of their family and why they trust you to protect their family.”