ADT 2008 Annual Report Download - page 106

Services and Products
ADT Worldwide supplies and installs electronic security systems to the residential, commercial,
industrial, education and government markets. A significant portion of the mechanical components
used in our electronic security systems are manufactured by our Safety Products segment. We also
provide electronic security services, including monitoring of burglar alarms, fire alarms and other life
safety conditions as well as maintenance of electronic security systems.
Our electronic security systems business involves the installation and use of security systems
designed to detect intrusion, control access and react to movement, fire, smoke, flooding,
environmental conditions, industrial processes and other hazards. These electronic security systems
include detection devices that are connected to a monitoring center that receives and records alarm
signals. For most systems, control panels identify the nature of the alarm and the areas where a sensor
was triggered. Our electronic security systems include: access control systems for sensitive areas such as
offices or banks; video surveillance systems, designed to deter theft and fraud and help protect
employees and customers; and asset protection and security management systems, designed to monitor
and protect physical assets as well as proprietary electronic data. Our electronic security systems also
include anti-theft systems utilizing labels and tags in the retail industry. Many of the world’s leading
retailers use our Sensormatic anti-theft systems to help protect against shoplifting and employee theft.
Purchasers of our intrusion security systems typically contract for ongoing security system
monitoring and maintenance at the time of initial equipment installation. Systems installed at
customers’ premises are either owned by us or by our customers. Monitoring center personnel may
respond to alarms by relaying appropriate information to local fire or police departments, notifying the
customer or taking other appropriate action. In certain markets, ADT directly provides the alarm
response services with highly trained and professionally equipped employees. In some instances, alarm
systems are connected directly to local fire or police departments.
Many of our residential customers may purchase security systems as a result of prompting by their
insurance carriers, which may offer lower insurance premium rates if a security system is installed or
require that a system be installed as a condition of coverage.
Customers
ADT Worldwide sells to residential, commercial, industrial, education and government customers.
Our residential customers typically include owners of single-family homes or renters in multi-family
apartment complexes. Our commercial customers include, among others, retail businesses, financial
institutions, commercial/industrial facilities and health care facilities. Our government customers include
federal, state and local governments, defense installations, schools and mass transportation providers. In
addition to advertising, direct mailings and the internet, we market our electronic security systems and
services to these customers through a direct sales force and, with respect to certain residential
customers, through an authorized dealer network. A separate sales force services large commercial and
governmental customers and focuses on key vertical markets such as retailer and banking.
Competition
The electronic security services business is highly competitive and fragmented with a number of
major firms and thousands of smaller regional and local companies. Competition is based primarily on
price in relation to quality of service. Rather than compete purely on price, we emphasize the quality
of our electronic security service, the reputation of our brands and our knowledge of our customers’
security needs. For large commercial, industrial, education and government customers the
comprehensive national and/or global coverage offered by ADT Worldwide can also provide a
competitive advantage.
2008 Financials 3