For Japan’s traditional consumer electronics firms, the kitchen may be their hope for the future. Companies like Panasonic Corp and Toshiba Corp are allotting engineering and research and development assets away from their TV operations and into developing ‘smart appliances’ for the kitchen. Japanese brands have been losing out in the living room to cheaper Asian rivals.
For instance, a refrigerator that texts pictures to show what’s for dinner, or a voice-controlled washing machine – these are the appliances that are being designed to talk to each other via the cloud to cut energy bills. For now, these models are expensive, a deterrent to most buyers. The Japan-only Toshiba smart fridge with camera runs to about $2,800, a hefty $2,000 more than the basic model. But these companies are hoping that 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, numbers confirmed by estimates from technology intelligence firm Pike Research. The worldwide consumer electronics industry is collectively preparing to descend on Las Vegas for next month for CES, the world’s biggest tech trade fair, but Japan may be pinning its hopes for the products it will unveil there more than the others.
Japanese brands have been taking in billions of dollars in losses in recent years, caused by high manufacturing costs and aggressive competition from the likes of Samsung Electronics Co and the strong yen, making exports of consumer staples like TVs more expensive. To make it in this new niche, Japanese companies must not only convince consumers to shell out for a whole new set of appliances, they’ll also have to hold their own against the same cheaper Asian rivals that stole their thunder in living room electronics.
The potential growth of smart goods sales has also stimulated peers in the United States and Europe, including Whirlpool Corp, General Electric Co, and Electrolux AB among others. In Asia, South Korea’s Samsung Electronics and LG Electronics have rolled out smart appliances. Samsung recently showed off its line at luxury department store Harrods in London, including a fridge fitted with a 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.