Brilliant Steps Up Efforts in Builder Market; Inks Deals With Schlage, ButterflyMX

At CEDIA, Brilliant announced new integrations with Schlage and ButterflyMX, a smart intercom company, which says it’s being installed in more than a third of new multifamily developments in the U.S. ButterflyMX will be will integrated into the Brilliant Smart Home Control and mobile app later this year, said the companies.

“We got a really strong response from homebuilders,” said Emigh, noting homebuilders want a smart home product that’s “part of the home” vs. an appliance that sits on a counter. People “don’t necessarily want to have to carry an iPad from room to room to control their home,” he said. Builders want home control that mounts in the wall and “really pops” for a model home, and one that offers integrated smart home technology but not at the $10,000-and-up cost of traditional home automation.

Brilliant offers an affordable entry-level price point for smart home ($299 for a single-light controller, $349 for two, on its website) that’s made possible by using existing lighting wiring for power and the embedded touch-screen interface for control: Brilliant's approach brings the potential for "every new home that’s being built to be a smart home,” Emigh told us.

Many of the 200 builders Brilliant works with once offered optional smart home packages in the $25,000-$50,000 range, said Emigh, but take rates were low at 2.5-3 percent. A system built around Brilliant switches and “a few other products” can start at $2,500 -- with the ability to upgrade -- and the package price can be tucked into the mortgage, he said.

Emigh called selling to builders a “consultative process” that includes a discussion of thermostats from Resideo, formerly Honeywell Home, and ecobee, plus smart locks from Yale and Schlage. Builders are generally amenable to installing smart home products that “are built into a home,” such as a smart thermostat, he said. Though Brilliant has a partnership with Sonos, builders might let customers supply their own non-built-in speakers.

A lot of builders use trusted integrators to install and set up Brilliant controllers, said Emigh, saying installation is easy enough for homeowners if they want to do it themselves, or for builders to take on or assign to the electrician on the job. “It doesn’t require deep technical expertise,” but having a system professionally installed can bring peace of mind, he said.

Last September, Brilliant was mulling brick-and-mortar retail, to expand beyond its e-commerce business, but that was put on the back burner as the builder business took off. “We still will,” he said, but as a startup, Brilliant wants to concentrate on “a couple of channels at once and not spread ourselves too thin.” Though it’s doing a few small retail projects, the company expects a stronger push in 2020, he said.

Brilliant argued unsuccessfully last year to have its controllers removed from (see 1809180020) the 8537.10.91.60 tariff line on components it sources from China under Trade Act Section 301 duties that took effect Sept. 24, 2018. “I’m not any more fond of them than I was then,” Emigh said, saying that as a startup, “you expect to face adversity here and there; you don’t expect that adversity to come from your own government.”

Brilliant's moving manufacturing out of China because “it’s so hard to read the tea leaves here and understand where it’s all going,” Emigh said. He wouldn’t disclose where the company's shifting manufacturing to, but expects it to happen a “couple of months.” On whether he’s concerned the new location could also be subject to future tariffs, the executive said, “Absolutely, that is a huge concern. The strange thing is, there’s nowhere in the world that’s safe.”

Efforts by the Trump administration to steer manufacturing to the U.S. haven’t swayed Brilliant “because the tariffs are being placed not just on finished products but on the components that go into them, many of which come from China,” Emigh said. The effect, he said, “is to move manufacturing away from the United States and China and to any other country in the world because goods are heavily tariffed when they’re made in the U.S.” since they use components from China, “and they’re heavily tariffed in China.” Goods manufactured elsewhere with Chinese components aren’t subject to tariffs, he said.

Emigh would prefer to spend “my capital building the business," rather than respond operationally to requirements “put on us by the government.” Citing a “risky” environment, Emigh said moving production is very expensive, but Brilliant has to “react to the reality of the situation: It doesn’t seem like they’re talking; it doesn’t seem like they’re making progress.”

Brilliant didn’t raise prices since it launched; instead it has “eaten some additional costs,” he said.