In a limited market, it is easier to survive to sell few expensive items than sell a lot of cheaper items. I think this home automation market getting very crowded. But I don't see anyone can replace X10 - they are the only one making lower cost devices. Alternatives to X10 are way too expensive than many users want to pay.
No matter what, I think X10 deserves great respect from HA users.
[stepping up on soapbox]
You are right. Alternative to X10 control/automation ARE far more expensive, which is why X10 getting out of HA does not make sense to me. Perhaps they think the growth of electrical noise makers like switching powersupplies, mandated CFL/LED bulb use, and the government execution of the Edison bulb as their doom. Their two wire wall switches, which can be installed by the consumer is a dinosaur watching the approaching asteroid. Their wall switches that can control CFLs and LED bulbs require a neutral in the wall box, which no one has. X10 Lamp modules may or may not work with CFLs and LED bulbs. X10 Appliance Modules will work with "green" bulbs, but sound like a 22 rifle shot anytime they change state. I dunno. I don't see a bright future for X10 HA. Obviously X10 does not think they can exist on security systems, CCTV, and remote controls, otherwise they wouldn't be selling third party PC tablets, intercoms, speakers, etc. I think X10 is trying to turn themselves into another DAK (only the techno geezers will understand) and I don't think they will make it as long as Drew did.
X10 "invented" powerline control which enabled home remote control and automation they deserve respect for that, but they have also shot themselves in the foot a lot. Sorta like Motorola who invented cellular telephony. Used to be the 800 pound gorilla but has atrophied to one tenth of what they were and just got googled. Who will wink out first?
[Steps off soapbox and wipes eyes]
Fade to black