New Chapter for Appliances Industry: Smart Appliances
A scenario where you can control your refrigerator, washing machine and air conditioner via your laptop, tablet or smartphone appears likely to become a reality in the short-term future. In response to explosive growth in the number of global internet users, appliances manufacturers’ product development is increasingly aligned with mobile connectivity and apps. This is an inevitable evolution, as the industry is considered to be mature in terms of technological application and product penetration in comparison to product areas such as smartphones or tablets. As leading manufacturers vigorously invest in boosting the commercialising of smart applications, it is only a matter of time before smart appliances become mainstream for consumers.
Technology evolving at fast pace
Let us define what smart appliances are exactly. Basically, if you can control or check your appliances’ status via a connected mobile device, you are engaging in the use of smart appliances. In adoption, smart appliances started with appliances controlled with internet connectivity via PCs. Development is however notably accelerating with the emergence and rapid sales growth for smartphones and tablets, with these products evolving in line with consumers’ lifestyles. Innovation increasingly involves interaction with the smart grid to understand what food types consumers purchase, how they cook and how they wash clothes, with this information being applied to the feature offering of appliances that are commonly used.
Moving forwards, manufacturers are also expanding appliances’ features with the Internet of Things (IoT), which shares information interactively across appliances and electronics for a total home package. Electrolux Corp, Haier Group, LG Corp and Panasonic Corp are part of All Seen Alliances, which is a cross-industry consortium that aims to adopt and improve the “Internet of Everything” in homes and industries.
Adoption gaining traction
Over the past few years, smart appliances has been one of main themes for any given trade exhibition, such as IFA or CES. Year after year manufacturers continue to launch smart refrigerators, washing machines, air conditioners and other products in order to illustrate their consistent efforts in developing smart appliances. Where are players now in terms of product developments?
Being also engaged in smartphones, both Samsung Corp and LG Corp are competitively incorporating smart appliances into their core business portfolios. Samsung Corp launched Samsung Smart Home, which offers a fully-connected system between appliances and smart TVs, smartphones and wearable watches. This system was launched in April 2014 in 11 countries including South Korea, the US and the UK in April 2014. LG Corp meanwhile launched its Home Chat service, which connects and communicates with LINE messenger, starting from the US in 2015. Still within the Asian region, Haier Group is also actively working towards smart appliances, especially air conditioners that connect with any iOS device. The drive towards smart appliances also encouraged smartphones manufacturer Beijing Xiao Mi td to launch smart air purifiers in December 2014 in partnership with one of China’s leading appliances company, Midea Group.
Elsewhere, Whirlpool Corp has collaborated with Nest to offer smart thermostats since 2014 on its application interfaces, starting with home laundry appliances. Whirlpool Corp is also expanding this offer to cooking appliances and refrigeration appliances. BSH Bosch & Siemens Hausgeräte meanwhile offers Home Connect, which controls and provides services for ovens and dishwashers.
Reality nearer now but ….
One of biggest challenges manufacturers faced in recent years was how to commercialise smart products and smart appliances in an economically viable manner globally and how to encourage consumers to pay additional money for these features. This problem is slowly resolving itself, as smart features are increasingly adopted across numerous product categories, driving the cost of adoption downwards. These offerings are also marketed as an added feature like any other premium feature, such as door water dispensers in refrigerators or a steaming function in washing machines. This typically proves more appealing than when products are positioned as a whole new area that requires the education of consumers in order to encourage them to buy.
The potential target consumer group for these products will be closely shaped by the rate of adoption of smart devices globally, as well as by consumers’ familiarity with apps usage. Appliance manufacturers also have to work with the longer replacement cycle of in comparison to electronic devices, with new purchases happening less frequently. Furthermore, the purchase for appliances starts at a later age, while purchases are primarily driven by females. This is in contrast to the adoption of electronic devices at an earlier age, while purchases of electronics are also very much male-driven. These factors thus narrow the potential consumer base for smart appliances. The main focus for manufacturers will thus be how to attract early adaptors or tech-savvy consumers by addressing their needs and emphasising the convenience of smart appliances.
Interested in more major consumer trends? Read “Top 10 Global Consumer Trends for 2015“.