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Smart home automation companies Cornflake and Future Systems merge

Two of the UK’s leading suppliers of home automation technology – Cornflake and Future Systems – have merged. Companies claim strategic fit in high-end residential market.

Two of the UK’s leading suppliers of home automation technology – Cornflake and Future Systems – have merged. Companies claim strategic fit in high-end residential market. The decision to combine the two companies will allow the new business, Cornflake, to take full advantage of the burgeoning global home automation market which, after decades as a niche sector, Cornflake thinks is now poised to take off as a mainstream consumer market, particularly in Europe and the UK. In 2011, the UK home automation market was worth around £65 million at distributors selling prices (DSP), representing a 12% increase on the previous year (source BusinessWire). The market for home automation systems has been less impacted by the economic downturn and decline in UK house building and there continues to be a high demand for home automation solutions in high-end luxury homes. By 2016, it is estimated that the UK home automation market will be worth some £156 million at DSP (source: AMA Research). According to Berg Insight’s 2011 Home Automation report, the number of new smart home installations worldwide was 0.44 million in 2010. The report predicts market growth at a compound annual growth rate (CAGR) of 65 per cent, with installations expected to reach 5.38 million by 2015 and total revenues growing simultaneously at a CAGR of 32.8% from US$ 2.3 billion in 2010 to almost US$ 9.5 billion by 2015 due to a perfect confluence of market, regulatory, strategic and technology trends. The growth of smart technology in the UK – not least sales of digital flat panel technologies, such as smart phones and smart TVs – combined with the rapid growth of digital audio and video streaming is driving the demand for whole house automation, where users control and manage household services such as heating, lighting, blinds, security, audio visual and data throughout the house by a single button; either in situ or remotely. Cornflake and Future Systems have been providing technologies including AV systems; home cinemas; data networks and control systems in the UK for many years. Robin Shephard (pictured, top) and Samantha Hine are joint owners of Cornflake. Shephard, CEO, said: “The companies are a great strategic fit – both operationally and culturally. The merged company will have first-mover advantage in the huge marketplace that is opening up at the top-end of the residential sector. Cornflake will lead the push towards truly intuitive homes; where technology and innovation are an inherent lifestyle choice.” Gary Lewis, owner of Future Systems and chairman of the UK trade body CEDIA, added: “The merger marks a dramatic step-change in our ability to compete in the UK and international markets. Together we have the scale and resources to quickly expand our geographic coverage and offer clients smart technology – backed by round the clock service – that will enhance their homes and lives. We are very excited to be riding the crest of this large wave.” Shephard, Hine and Lewis will all become executive directors of the new company, with each owning a 33% stake. With home automation set to be the driving force for clients seeking to future-proof their homes, many architects will require a seismic shift in training and product familiarisation to deliver fully integrated builds. In a bid to win this important market share Cornflake intends to launch a designer-styled, Smart App/artment in central London next month. Billed as the UK’s first experience centre – a retail concept borrowed from the USA – the venue will enable invited clients and architects to road-test the latest technology in a showroom designed to resemble a fully-working modern home.