ADT Competitors Analysis [2021]: How Secured Are They?

ADT Inc., a security firm based in Boca Raton, Florida, is one of the world’s largest home monitoring and alarm services providers. ADT provides Security-as-a-Service (SaaS) to both commercial and residential customers.

It offers various smart home gadgets, including video surveillance systems, automated door locks, thermostats, smoke detectors, and fire alarms. Moreover, ADT carries burglary detection, Cybersecurity, Radio Frequency identification, electronic article surveillance, and automated access control.

According to Strategy Analytics, the US interactive security market grew by an estimated 9.3% to more than 15.6 million residential subscribers in 2020. From the report, ADT topped the chart again, with 3.2 million subscribers despite the raging pandemic.

Overall, ADT has about 6.4 million customers in over 200 locations spread across the US and Canada, making it the largest field network in its industry.

Despite registering an increased net loss of $632 million from $424 million the previous year, its revenues grew yearly from $5.126 billion to $5.315 billion in 2020. One of the company’s successes was exceeding the one million mark in ADT Command and Control Home Platform installations.

The company managed to achieve this milestone in two years since ADT introduced the service in 2019. It currently has a market value equity of $6.898 billion.

ADT Business Strategy

ADT’s overall objective is value creation for customers by being the best in its industry. The company focuses on its human resources, business strategy, customer service culture, and overall financial efficiency to accomplish this. Its business strategy is to provide innovative security technology to meet the changing needs of its customers.

The company applies different marketing strategies to increase its customer base. It uses a mix of advertising, public relations, endorsements by celebrities and influencers, persuasive online content about the benefits of using ADT services, events showcasing its products, and word-of-mouth referrals from existing customers.

Through its Refer a Friend Program, customers earn the referral bonus after any referred customer changes to ADT.

ADT uses bundle pricing strategy, which pairs its products and services to offer a single price. The company typically provides its services at an up-front cost and monthly fees for continued use/service.

This strategy is prevalent in most of ADT’s product lines: personal emergency response, video surveillance, keyless home automation, and home security alarm systems.

Through mergers and acquisitions, ADT has expanded its service offerings and strengthened its market position. In 2020, ADT acquired Defenders, its largest independent dealer, to help eliminate dealer margins and reduce customer acquisition costs. 

ADT SWOT Analysis

Strengths

  • Strong brand recognition: ADT is the industry leader and market expert, having been named as the top provider of home security and automation installations. This has allowed it to build a strong brand presence with its clients. The firm was founded in 1874 and, since then, has earned an unrivaled reputation for providing high-quality goods and services.
  • High-quality products/services: ADT is known for the high-quality home security and automation services it provides, including 24/7 monitoring by its expert technicians. ADT has also invested in research and development (R&D) activity to develop its existing product portfolio and introduce new products that meet customer demands.
  • Effective distribution channels: ADT’s vast client base is linked with its wide distribution network, including onsite dealerships. This allows the company to gain direct access to new customers while minimizing costs. Also, through its dealer network, ADT can provide technical support and services across all of its clients. This is something that most competitors cannot offer.

Weaknesses

  • Limited investments in newer Technologies: Although ADT has invested more in R&D to enhance its product portfolio, it invests less in cutting-edge technologies like telematics and mobile apps. In recent years, these areas have seen significant development, and they are beginning to gain traction within the market. By devoting a more substantial portion of its budget to AI and cloud computing, ADT could provide its customers with more advanced products and services.
  • Class action lawsuit: ADT is facing a class-action lawsuit after one of its fired employees added his email address to customers’ accounts, giving him access to live video feeds from their cameras. As a result, the customers’ privacy was compromised, and they have filed a suit against ADT seeking compensation for negligence. Such negative publicity and consumer outrage could impact ADT’s reputation and its future growth prospects.

Opportunities

  • Increasing Demand for Smart Homes: A growing number of customers are adopting home automation devices that allow them to control appliances, lighting, heating, and cooling systems, security sensors, and locks from a remote location. As a result, demand for these products has seen a significant increase in the past few years. ADT’s strength is its ability to offer integrated solutions to its customers. By providing more advanced products and services, ADT could boost its client base.
  • Expanding presence in emerging markets: Although ADT has a global presence across the US and Canada, it does not offer similar services in emerging markets like India. In addition to this, there is a lack of awareness among Indian customers regarding the firm’s product portfolio. This is a significant growth opportunity for ADT, as India’s population is at a critical mass of consumers willing to spend on high-quality goods and services.

Threats

  • Growing competition: New market entrants have emerged in recent years, aiming to increase their presence in the industry. These new players offer similar services as ADT and have a large geographical footprint that can help them expand their reach more rapidly. ADT will need to develop cutting-edge products and services to protect its share of the global home security and automation markets.
  • Increasing labor costs in the US: ADT is not fully automated, and its employees carry out several activities, including installation and repair services. To support its growing customer base, ADT will have to increase its workforce without increasing costs significantly. If the company fails to do so, it could increase expenses that might decrease profitability.

ADT Competitor Analysis

ADT is facing increasing competition from new market entrants and established rivals. The company will need to boost investments in newer technologies and improve its distribution network to enhance its market share in this competitive environment.

This part will examine the competitive landscape of ADT’s competitors, including their revenues, growth, market share in their respective markets, and competitive advantages.

Vivint

Vivint [NYSE: VVNT] is a US-based home automation and security services firm. It offers a range of products to its customers, including video surveillance, fire detectors, thermostats, and lighting controls. In a similar product portfolio as ADT’s, Vivint has a lesser market share compared to the latter.

It combines its integrated smart home system with an in-home consultation to serve approximately 1.7 million customers spread across the US and Canada.

Vivint became publicly traded in 2020 after its merger with Mosaic Acquisition Corp and trades on the New York Stock Exchange. As of September 20th, 2021, it had a market cap of USD 2.35 billion and a revenue of $698.5 million in the second quarter of FY 2021.

Through continuous product development and the incorporation of modern technologies, Vivint has improved its product offering and expanded its geographical presence.

A good example is its cloud-based home automation platform Vivint SkyControl that integrates Vivint’s products on a single platform. The company is also focusing on developing partnerships with local retailers to expand its distribution network.

Some big brands such as the Nest, Google Home, Kwikset Smart Locks, and Amazon Echo integrate with Vivint’s smart home platform to provide enhanced services to customers.

While Vivint may have grown in stature, it is still far behind ADT. It will need to expand its geographic footprint to increase sales and build attention among its customers. To sustain growth, Vivint also needs to invest heavily in technology, which requires capital for this purpose.

Frontpoint Security

Frontpoint Security is a US home security services firm that has been in business since 2007. It offers an end-to-end suite of smart home security solutions, including motion sensors, smoke detectors, home security cameras, and automation. These products are sold through Frontpoint’s website as well as on major e-commerce platforms such as Amazon.

Frontpoint concentrates on offering user-friendly products that are easy to install without the help of its team of experts. It is known for building lasting customer relationships through its rigorous post-sales support.

Although the company is not publicly traded, it has grown significantly to achieve an estimated $74.7 million revenue with about 350 employees.

ADT offers a range of security services that go beyond the monitoring of physical surroundings. It has expanded its client base by emphasizing customer satisfaction and building relationships through regular training sessions and seminars.

In contrast, Frontpoint’s primary focus is on product sales. As a result, it has struggled to gain market share from ADT, even with its fast growth.

Alarm.com

Alarm.com [NASDAQ: ALRM] is a technology and services company that helps customers monitor and control their homes, businesses, and automobiles.

It offers a smart home platform known as Alarm.com and provides connected technology and services to residential and commercial customers through its website, mobile apps, and a network of dealers.

It competes with ADT through its Alarm.com platform and offers functions such as video monitoring, security systems, and access to third-party smart home devices.

As of 2021, the company had over six million active users and about 6,000 service providers. With such a solid customer base, Alarm.com has established itself as a prominent security firm in the US.

Alarm.com’s main strength is its ability to provide remote access to users. It offers various functions such as unlocking doors remotely, arming and disarming security systems remotely, and control of all home automation systems – allowing customers to monitor and control their homes from anywhere.

In 2020, its total revenues increased 23 percent to $393.3 million, and non-GAAP adjusted EBITDA grew to $125.3 million from the previous year, thus showing a strong performance in terms of growth rates.

Stanley CSS

Stanley Security is a company that provides home security services to a variety of commercial and residential clients. The company’s services include CCTV installations, access control systems, fire alarms, intruder alarms, and other high-end security solutions.

Stanley CSS is a subsidiary of Stanley Black & Decker [NYSE: SWK], which is a company that manufactures tools, engineered fasteners, and security hardware. Stanley CSS provides its extensive range of products through its dealers and directly to its clients via its website.

Stanley Security Services’ product lineup includes a suite of integrated security solutions. These include Access control, Alarm verification, intrusion systems, real-time location systems, and touchless automatic doors.

Stanley Security is mainly focused on the commercial sector, where it has developed close partnerships with large-scale businesses such as universities and government institutions

Stanley Security’s biggest challenge is other security companies that target small and medium enterprises (SMEs). Because SMEs form a significant part of the US economy, Stanley needs to re-evaluate its distribution strategy and implement more effective marketing campaigns that target the SME sector.

Comcast XFINITY Security

Comcast Corporation [NASDAQ: CMCSA] is a global mass media company that provides video, high-speed internet, and voice services across the US.

The Comcast XFINITY by Comcast Security suite has five components – Video, Security, Home, Internet, and Voice. Their solutions are sold to both residential and commercial customers through their dealers and direct sales.

Apart from home security, Comcast Security also offers home automation, energy management, and whole-home wireless coverage. Their products are designed to provide comprehensive protection for all the elements of a customer’s home – which is an approach that differentiates it from other security companies.

Comcast Security competes with ADT by offering a range of security services to its customers. However, it is not as comprehensive in providing these services and therefore has room for expansion. Comcast Security needs to differentiate itself from ADT by focusing on its strength of providing integrated security services.

In 2017, Comcast announced that it was approaching over one million users since its inception five years ago. It also released its new machine-to-machine network called the Xfinity Home Control service.

This was done to enhance security and customer experience while reducing costs associated with providing energy at homes. Overall, Comcast Security is successfully expanding because of its focus on both enterprises and SMEs.

How ADT Stands Out Against Competitors

ADT has built a strong reputation for its reliable security services over the years. This is seen in its customer satisfaction ratings, which are high. The company has made a strong service advantage over its competitors due to its long history in the security industry and its partnerships with well-established manufacturers of security equipment.

ADT’s security services are available through dealers, which act as middlemen between the company and its clients. This allows the company to keep operating costs low since they do not need to maintain an extensive sales force for direct marketing purposes.

In addition to this, ADT’s security solutions go through extensive R&D processes to ensure that its clients are satisfied with the results. Its long-standing partnerships with manufacturers allow it to stay abreast of the latest security trends, ensuring that its products are always at par with industry standards.

ADT Competitor Analysis (FAQs)

Question: Who is ADT’s Biggest Competitor?

Answer: ADT’s main competitor is Vivint. The two companies are the largest in the security industry, and they have been competing to gain a larger share of residential customers for several years. Other competitors include Comcast Security, Frontpoint Security, and SimpliSafe.

Question: Is ADT a Big Company?

Answer: ADT provides security services to more than 6.4 million customers through its network of dealers and direct sales. This makes it one of the largest security providers in the United States and Canada.

Question: How does ADT Stand out from its Competitors?

Answer: ADT distinguishes itself from its competitors by focusing on both small and large businesses. It also delivers high-quality services through an extensive dealer network, which reduces costs while allowing it to react to market changes.

Conclusion

ADT Security Services has a long history in the security business and has earned a reputation for delivering dependable services to its customers. Its broad dealer network provides low operating costs while remaining flexible to react to market changes.

Its concentration on both small and large businesses is ADT’s main competitive advantage over other security companies. To stay up with industry trends, ADT has invested significantly in R&D, ensuring that it offers high-quality services to its clients.

Further Read:

Top Business Case Studies Of All Time: Pros and Cons

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Datadog Competitors Analysis: Is Their Strategies Effective?

Brightedge Competitors Analysis: Are They Leading?

References:

https://corporate.comcast.com/comcast-voices/xfinity-home-approaching-one-million-customers

https://investors.alarm.com/financials/quarterly-results/default.aspx

https://growjo.com/company/FrontPoint_Security

https://finance.yahoo.com/quote/VVNT/

https://news.adt.com/news-releases/news-release-details/adt-acquires-its-largest-independent-dealer-defenders

https://www.strategyanalytics.com/access-services/devices/connected-home/smart-home/reports/report-detail/top-10-us-interactive-security-providers-april-2021

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