Security Alarm Services in the US Industry Market Research Report from IBISWorld has Been Updated

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While the recession caused businesses to reduce security budgets, revenue will recover over the next five years. Revived disposable incomes will encourage investment in low-cost monitored security systems, and industry players will increasingly take advantage of new technology, including biometrics. Furthermore, heightened fire and security regulations will positively affect growth. For these reasons, industry research firm IBISWorld has updated a report on the Security Alarm Services industry in its growing industry report collection.

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Firms will use new technologies like biometrics to boost demand from businesses

The Security Alarm Services industry provides the installation, maintenance and monitoring of alarm, fire and surveillance equipment. According to IBISWorld industry analyst Andrew Krabeepetcharat, “While the industry has benefited from an overall trend toward alarm and surveillance systems, the recession caused many clients to reduce security budgets.” Consequently, in the five years to 2012, IBISWorld estimates that revenue will decline at an annualized rate of 0.8% to $16.7 billion.

The fall in demand for construction following the recession reduced the number of new security systems installed. “However, says Krabeepetcharat, “many companies have started to replace guards and patrols with electronic security systems, which are often more cost-efficient by avoiding labor costs.” Government changes to fire and security codes have also boosted industry demand, increasing premiums on insurance policies and fueling consumers' concerns over a potential rise in the crime rate. The availability of low-cost monitored security systems for the residential market has also increased the household penetration rate. Still, the residential market is sensitive to changes in economic activity, and the recent fall in disposable income dampened demand for new and ongoing services. In 2012, industry revenue is expected to increase 1.6% as the economy returns to recovery and businesses start to invest in security again. Despite this growth, profit will remain constricted. In 2012, IBISWorld estimates industry profit to make up 5.0% of revenue, down from 6.0% in 2007. As a result, the number of industry firms has declined on average 0.9% per year over the five years to 2012 to 8,979, largely due to major players acquiring competitors struggling in the poor operating environment. For example, Tyco's ADT Worldwide, the largest player in the industry, acquired Broadview Security in 2010.

The Security Alarm Services industry is characterized by a large number of small players, some of which are subcontractors for major players and provide installation and maintenance services. About 80.5% of industry enterprises are small businesses with nine or fewer employees. Similarly, firms with fewer than 20 employees represent over 90% of the industry total. On the opposite end of the spectrum, the largest player occupies a significant portion of the market. Although the industry's largest player, Tyco, is expected to account for a significant share of industry revenue in 2012, the next largest player is a fraction of that size. This provides the Security Alarm Services industry with a low level of concentration, with the four largest firms estimated to account for about one-third of industry revenue. Industry concentration has increased during the past five years due to merger and acquisition (M&A) activity. In the five years to 2012, the number of firms operating in this industry has decreased 0.9% annually to 8,979. In 2010, Tyco acquired the second-largest operator, Broadview Security, during the year. Despite this, the level of concentration is not expected to change significantly over the short term.

In the next five years, firms will increasingly take advantage of new technologies such as biometrics, which involves face or fingerprint recognition. Small business growth and increased disposable income levels will also contribute to rising industry demand. In the five years to 2017, revenue is projected to increase. Profitability will also improve as operators take advantage of the cost savings and restructuring implemented following the recession.

For more information, visit IBISWorld’s Security Alarm Services in the US industry report page.

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IBISWorld industry Report Key Topics

This industry comprises establishments that sell security systems, such as burglar and fire alarms and locking devices, and offer installation, repair or monitoring services of electronic security alarm systems.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit or call 1-800-330-3772.

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