“Power to the people” as the saying goes, and that message is coming through loud and clear in the smart home security market. Do-it-yourself smart home security device bundles are not new. However, do-it-yourself, professionally-monitored smart home security device bundles from companies backed by, or a part of, big technology brands are. Professional-grade home security and monitoring services have been nearly exclusively tied to smart home service providers. With Ring’s new Ring Alarm bundle, that is starting to change.

Smart home device companies are taking the plunge into this segment of the market, and for good reason. While smart home service providers serve millions of customers in total, their cumulative installed base is only a small fraction of the addressable market. Smart home security bundles offer a compelling value proposition to the wide majority of the consumer market.

We dove into this market dynamic earlier this year in our comprehensive report that examines the dynamics of the global smart home surveillance camera market. For Ring, the Ring Alarm security bundle is a natural evolution of the cameras and video doorbells it sells that are meant to secure a residence. Adding a dedicated alarm system fills the gaps in Ring’s security value proposition.

New opportunities for smart home device companies and big tech consumer brands are emerging as consumers’ concept of the “smart home” is beginning to expand beyond discrete devices and into services enabled by smart home hardware. Strategy Analytics’ Smart Home Service Director Bill Ablondi highlighted this as a central theme of his recently published report on the U.S. interactive security market. I’ve noted this in recent analysis of similar moves by Ring’s parent company Amazon, and Vodafone and Samsung teaming up for “V-Home by Vodafone”.

A bit of backstory: Ring Alarm’s predecessor, Ring Protect, was supposed to make its debut in October 2017, but a lawsuit filed by ADT in early 2017 halted the rollout of Ring Protect. The debut was further delayed when Amazon acquired Ring for $1.1 billion in February 2018. Furthermore, during the hiatus, Nest updated its Nest Protect smoke and carbon monoxide detectors, necessitating a rebranding of Ring Protect to avoid confusion. With intellectual property issues between Ring and ADT apparently resolved, Ring’s place in Amazon’s organization made clear, and a rebranding to Ring Alarm, Ring made its solution available to order in June 2018, with the solution shipping in July 2018.

What makes Ring Alarm different from other contract-free smart home security bundles, such as those offered by Abode, Scout, Vivint, Samsung (via its partnership with ADT), SimpliSafe, or Google’s Nest (via its partnership with Brinks)? We believe Ring Alarm hits the mark in three areas:

• Simple installation, configuration and use – Ring Alarm is aimed squarely at consumers that have a do-it-yourself mentality. No tools are required to install any of the hardware included in Ring Alarm; the sensors and keypad mount to walls or other vertical surfaces via heavy-duty two-sided tape. The Ring smartphone app guides users through the initial setup process, and the app can be used to remotely respond to notifications and control devices as appropriate.
  • This completely eliminates any professional installation and configuration fees, strengthening the appeal of the bundle to consumers. The fees and potential complexity that typically accompany professionally installed smart home security solutions are often among the most potent obstacles in a consumer’s purchasing journey.
• Bundle pricing – while the Ring Alarm bundle includes only a handful of devices – a base station, keypad, contact sensor, motion detector, and range extender – its $199 price is half that of a similar bundle from Nest. An array of additional sensors such as flood, freeze, smoke, carbon monoxide, and additional motion and contact sensors range in price from $20 to $40, or about $10 to $20 less per unit than those offered by competitors.
  • Customers aren't locked into a static solution. They can add as much or as little equipment as needed, allowing them to customize Ring Alarm specifically to their security needs, the physical characteristics of their residence, or both.
• Low cost, no-contract monthly subscription for professional monitoring – Ring Alarm’s $10 per month, contract-free price – which includes LTE backup, unlimited storage for Ring cameras and a 10% discount on purchases made at Ring.com – is a potential game-changer for Ring. It is $5 a month lower than SimpliSafe or a Samsung-ADT offering, $20 a month lower than a no-contract Nest-Brinks solution, and $30 a month lower than Vivint’s no-contract service.
  • It is not clear at this time what company is providing the professional monitoring for Ring’s solution, but Strategy Analytics believes it is likely one of the many contract call center services available in the U.S. Outsourcing this service would allow Ring to avoid the expenses associated with building out an in-house organization, which would limit the company's ability to undercut its competitors. This way, Ring’s pricing strategy makes it more challenging for smart home security device companies and service providers to compete.

Is Ring Alarm the end-all be-all smart home security solution? No, but Strategy Analytics believes it is among the more complete offerings released to date, and a sign of things to come as demand for these bundles from consumers increases. It ups the ante for smart home device manufacturers and service providers to ensure their offerings align with consumers’ increased expectations for what self-installed smart home security bundles offer.