Firms pin hopes on 'smart' appliances

Comment on this story

iol scitech dec 4 smart fridge


A model shows a tablet, which has an application to control and automatically save energy consumption of home electrical appliances.

Tokyo - For Japan's electronics firms, the kitchen is the final frontier.

Companies from Panasonic to Toshiba are diverting engineers and money away from their TV operations and into developing 'smart appliances' after losing out in the living room to cheaper Asian rivals.

A fridge that texts pictures to show what's for dinner, a voice-controlled washing machine - appliances like these are being designed to talk to each other via the cloud to cut energy bills.

For now, they're expensive, deterring buyers: a Japan-only Toshiba smart fridge with camera runs to about $2 800 (about R30 000) versus less than $800 for a basic model. Yet as more products come on the market and competition cuts prices, global smart appliance sales will rocket to $35-billion by 2020 from just over $600-million last year, according to technology intelligence firm Pike Research.

As the industry prepares to descend on Las Vegas next month for CES, the world's biggest tech trade fair, that's mouth-watering for all electronics makers. But none more than Japan's.

They've been squeezed into billions of dollars of losses in recent years, caught between high manufacturing costs, aggressive competition from the likes of Samsung Electronics and the strong yen, making exports of consumer staples like TVs more expensive.

To prosper in the new niche, Japanese companies must not only convince consumers to shell out for a whole new set of appliances, which need to be all from the same brand to guarantee compatibility. Further down the line, they'll also have to hold their own against the same cheaper Asian rivals that stole their thunder in leisure electronics.

“Everyone says having the same brand of goods would be more energy-efficient, but in the end it comes down to the price and function of each product,” said Satomi Wakamatsu, a 41-year old housewife from Hiroshima. She owns a Hitachi fridge and washing machine, and an air conditioner made by Daikin Industries.

Wakamatsu considered buying smart appliances. But she balked when she added up the cost of all-new appliances, in addition to the home energy management system (HEMS) needed to connect them to each other to monitor and cut energy usage - a further $2 000-$3 000.

Sales of Japanese companies' HEMS were helped over the last year by hefty government subsidies designed to stimulate energy efficiency - but they ended in October. Panasonic sold 20,000 HEMS units between April and September, double its full-year target, but said it's unsure if that pace can be sustained without the subsidy.

Toshiba, meanwhile, wants 20 percent of its appliance sales to be from 'smart' goods by the end of fiscal 2014.

The potential growth of smart goods sales has also stimulated peers in the United States and Europe, including Whirlpool, General Electric, Electrolux, Robert Bosch, and Indesit Company.

In Asia, South Korea's Samsung Electronics and LG Electronics Inc have rolled out smart appliances and have plans to go further afield: Samsung recently showed off its line at luxury department store Harrods in London, including a fridge fitted with an LCD panel to keep track of groceries and suggest recipes.

“If you see the recent trends in the appliances market, made-in-Japan products are increasingly threatened by their Korean and Chinese counterparts with enhanced technologies and competitive prices,” said Jamie Ko, head of consumer appliances at research firm Euromonitor.

As sales of digital audiovisual gadgets have waned over recent years, many Japanese firms already make more money from traditional household appliances, mostly sold in Japan, than from consumer electronics sold globally.

For instance, Panasonic lost 16.5-billion yen on its audio and TV unit in the six months to September 30, when its appliances pulled in 17.2 billion yen, about 12 percent of its total operating profit.

But the basic cost of the smart appliances and the hubs that service them remain beyond basic consumers' budgets and exceeds the likely medium-term energy savings. At this stage in their development, the devices will only cut electricity bills by around 10 percent, according to Toshiba and Panasonic.

Japanese consumers' eagerness to go green may also have waned since the aftermath of March 11, 2011, when a massive earthquake triggered a nuclear plant meltdown and spurred debate on energy supply and saving.

“Two years ago I thought sales of smart appliances sales would accelerate as (saving) energy had become a hot topic, but I think the rush in Japan has slowed somewhat,” said Masami Yamamoto, the president of Fujitsu, which supplies cloud computing services for the systems needed to run the appliances. - Reuters

Hungry for more scitech news? Sign up for our daily newsletter

sign up

Comment Guidelines

  1. Please read our comment guidelines.
  2. Login and register, if you haven’ t already.
  3. Write your comment in the block below and click (Post As)
  4. Has a comment offended you? Hover your mouse over the comment and wait until a small triangle appears on the right-hand side. Click triangle () and select "Flag as inappropriate". Our moderators will take action if need be.


Join us on

IOL-Social networks IOL-Social networks IOL-Social networks IOL-Social networks