Crestron Reveals Revenues and Broader Product Reach

Rockleigh, N.J.-based Crestron is the 800 lb gorilla in the luxury smart home market. The privately-held company has long been the leading provider of equipment and systems in the most financially- and technically-demanding smart home installations. With such a toweringposition in such a lucrative market, the company has felt little compunction to raise its profile outside of its core market; however, smart home is a market that has drawn in some of the largest technology companies in the world, and increasingly, Crestron will be faced with a choice about how it wants to position itself in that growing market. 

Recently, Crestron has seen its profile start to rise and it has also taken the opportunity to be more forthcoming about the size and scale of the company. In December 2016, Crestron gained some valuable publicity through its systems being used by Mark Zuckerburg in the development of the Facebook founder’s own Jarvis AI smart home project. In January (2017), Crestron CTO Fred Bargetzi told Bloomberg that Crestron was a "$1.5 billion company." According to the company, close to 80% of those 2016 revenues are from enterprise installations. Even so, that means smart home deployments of its devices and controllers, including lighting control, multiroom audio/video, security, energy monitoring, motorized window coverings, energy management, security, and more, were responsible for around US$300 million in revenues last year. By comparison, Control4—the only publicly-traded comparable smart home equipment provider—reported (in February) 2016 revenues of US$163 million, which is just over half of Crestron’s smart home income.

Crestron has seen a raft of competitors move into its market with lower-cost implementations. Vendors such as AMX, Savant, and Control4 have all focused on the same installer network market that Crestron inhabits, and while they have built up their own customer and installer bases, they have not been able to topple Crestron in the largest and most valuable installations.

However, there are signs that even in the most luxury implementations, Crestron must face new competition and demands to integrate with other players. Even Zuckerburg’s own implementation included consumer devices such as Sonos, a Samsung TV, and a Nest cam. Not that Crestron sells TVs or does not already integrate with third-party devices, it is just that the company has long-focused on delivering a vertically-integrated solution. In March (2017), Crestron introduced a US$500 surcharge for dealers integrating Lutron and Vantage lighting-control systems in place of Crestron’s own competing options.The driver for the surcharge has been levelled at the support costs for these third-party offerings, as Crestron provides technical support to its installers for the life of its products.

Crestron continues to develop and expand its offerings from greater capacity and high definition support in its AV controllers, to new generations of touch screen control panels, as well as adding new product lines such as the motorized window blinds launched a few years ago. There are also signs that the evolving smart home market is growing the appeal of subscription services and some consumer device integration at Crestron. Crestron’s Pyng wireless gateway and controller extends the traditionally wired Crestron system to embrace specific partner wireless smart home connectivity and devices. There is also potential for the company to support a subscription service model for its smartphone app—switching from the current US$99 Crestron app.

Further out, it may be that the company’s larger enterprise business may impact smart home offerings. Earlier this year, Crestron launched its conference room management system that incorporated Bluetooth beacons to recognize an individual’s proximity and adapt system settings accordingly. There is also the Crestron Mercury, a new table-top meeting room system set to compete with existing offerings from players such as Polycom. The Crestron Mercury device represents a new low-price, high-volume device strategy for Crestron. Depending on the company’s success with the device—given the growing complexity of partnerships and lower price point offerings within the smart home—there is potential for this device, with technologies and a market model that are far closer to the emerging smart home mass market than anything Crestron has offered before. This can draw the company into new areas in the smart home.

Crestron may well be more comfortable in its ultra-high-end installer network smart home niche, but the emerging opportunity and a changing competitor landscape could tempt the company to enter new smart home market areas.