This week, Comcast Corporation (NASDAQ:CMCSA) entered into an agreement to buy Icontrol Networks for an undisclosed sum. The Austin, Texas-based company makes platforms for connected-home security and the Internet of Things (IoT) and has been the main platform for Comcast's Xfinity Home for the last six years.
Comcast is purchasing the Converge software platform while another company will buy some of Icontrol's other businesses.
Comcast says the platform already powers the touchscreen panel and back-end servers for its Xfinity Home service. The system allows communication between home sensors, cameras, and connected thermostats.
Does it matter to shareholders?
The IoT is one of the most important segments technology and telecom companies are investing in, and Comcast is no different.
Comcast said in its blog post that, "As this business becomes part of Comcast, we will strategically invest in its technology and technologists, so that we can deliver new features, products and services to both individual Xfinity Home customers and enterprise-level Converge customers, faster than ever before."
New IoT products and features could help Comcast grab a larger portion of the connected-home market. That's good news for investors considering that Markets and Markets predicts the smart-home market will grow to $121 billion in the U.S. by 2022.
Comcast's move will help it compete better with AT&T's (NYSE:T) Digital Life connected-home system, which is currently available in about 84 markets across the U.S. Back in February, AT&T announced it was considering teaming up with Ericsson to expand its wireless home security and home automation platform global. AT&T hasn't finalized anything yet, but a move like that could put significant pressure on Comcast to expand its home connectivity services in order to keep up.
Comcast's purchase of Icontrol isn't going to do much for the company in the short term, but it should help Comcast build out a stronger portfolio of connected-home services down the road.
Chris Neiger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.