Latest WTRS Newsletter on INSTEON & Home Control Raises Viability Questions During Housing Decline

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WTRS Newsletter outlines doubt about INSTEON's future success, projecting two intersecting forecasts with the outcome dependent on both the Housing Market decline and decisions by SmartLabs to proceed in one of two directions. The opportunity for powerful challenge from ZigBee for home automation and sensor networks is a potential consequence.

WTRS has reevaluated its outlook of INSTEON's prospects and is now projecting two parallel forecasts. In July of 2006 WTRS found INSTEON to be the best positioned product to succeed in wireless home automation markets. The current "As Heard on the Wire at WTRS" Newsletter would still categorize the technology as excellent, however the issue of success is now a question of market execution and company strategy.

INSTEON products are currently enjoying good and growing sales through both the retail and professional channels. There is serious interest from large OEMs in developing complimentary products to sell through mass market channels.

"During the past year the investment in people driving OEM sales at SmartLabs appears to have declined," according to George West, Senior Analyst and President at WTRS. "There are other indications that the company may be responding to the current housing market turmoil by reducing its investment in growth initiatives and is instead focusing on cash flow from operations. This is the basis for the WTRS assessment that there is considerable risk to the price/volume story for INSTEON in the absence of an external catalyst such as venture investment."

This is the context for the parallel forecasts for INSTEON. If the market were very static without competition in differing stages of development then a conservative strategy makes some sense. With the recent release of the ZigBee Pro specification and the Home Automation profile the building blocks are finally in place for ZigBee products to accelerate. Another dark horse in the form of a company with considerable experience in the controls sector that has been challenged by a number of different issues is Echelon and the Lon Works variants.

WTRS will release a new "INSTEON Emerging Technology Report" in short order, thoroughly examining the conditions and prospects.

Those interested in reading the "As Heard on the Wire at WTRS" article regarding INSTEON, may subscribe to the newsletter at no charge at http://www.wtrs.net.

For additional information, please contact us, or visit our website at http://www.wtrs.net. With an eight-year record of successful growth, we're ready to help your company make market decisions and plan for the future. WTRS (West Technology Research Solutions) is a California-based research, publishing and consulting company focused on emerging wireless technologies.

For additional information visit us at http://www.wtrs.net
or call Karin Hall, WTRS, 650.940.1196

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