Electrolux Has New Stab at Smart Home After Dot-Com Bust

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Electrolux AB is revisiting dot-com era attempts to build an intelligent home around its appliances as the likes of Apple Inc. and Google Inc. ramp up their offerings in the field.

This year, the Swedish company will start selling an oven that downloads instructions on how your roast should be cooked from a recipe app. It films the job too, so home chefs can keep one eye on the process on a screen while entertaining guests.

Jan Brockmann, chief operations officer at Electrolux, said 2015 may be the year when appliances finally get smart after decades of false starts. He’s predicting they’ll make up 10 percent of the market in five years’ time, from less than 1 percent today.

“This is a year of massive launches,” he said about the market in an interview at the company’s Stockholm headquarters. “That will really create volume and value.”

The connection of appliances through data networks could realize a vision of automated homes that’s been around since the 1950s without really taking the step from prototypes and science fiction visions to readily available consumer products.

Households never really understood the benefits of a smart home or a connected appliance, said Michael Wolf, a Seattle-based industry analyst at NextMarket Insights and author of newsletter Smart Home Weekly. While some products will just add networking and connectivity for “technology’s sake,” prices are falling and software is improving to the point where tangible value can be delivered, he said.

Automation Center

“I think the kitchen is going to see significant growth over the next few years,” Wolf said by phone.

Google has placed Nest Labs, a maker of thermostats it bought last year for $3.2 billion, at the center of a home-automation offering. Partners include Whirlpool Corp., Mercedes Benz and smartlock maker Kwikset Corp. Apple, meanwhile, is working on HomeKit, a concept for controlling a range of home electronics through its devices.

Electrolux shares traded 0.3 percent lower at 264.50 kronor at 1 p.m. in Stockholm, in line with the OMX Stockholm 30 Index, giving the company a market value of 82 billion kronor ($9.6 billion).

Europe’s biggest appliance maker has had its share of failure in the field. In the late 1990s, Electrolux tied up with network equipment maker Ericsson AB to develop products such as a screen-fitted refrigerator. Brockmann said that while some insights gained from the products live on, the venture itself was scrapped after a couple of years.

Screen Fridge

“Mobile hadn’t developed, the industry hadn’t developed, the costs weren’t at the right level,” he said, speaking in a new mock-up smart home Electrolux has built. Brockmann, who became chief technology officer in 2011 and chief operations officer this month, now smiles at the notion that anyone needs another screen mounted to a fridge.

In the 15 years that have passed, technology has developed immensely and there’s a stronger push than ever to develop standards that make it easy to hook up all devices to one system, Brockmann said. That way, your TV can tell you when you leave the fridge door open.

For Electrolux, connected appliances is part of a larger strategy to forge closer bonds to customers. The new oven is linked to an app with a community where consumers can tie up with others to share their kitchen experiences.

“If you buy a connected product we will have a different relationship as opposed to a one-time buy,” Brockmann said. “We will know your needs much better. We can offer you more directed stuff, you can give more feedback.”

Home automation isn’t rid of its teething problems. There have been scathing reviews of setups that do little more than frustrate users. Electrolux was part of a pilot project two years ago in a new area of Stockholm where devices were put to the test to simplify life and save energy for a family.

Waiting Hungry

After incidents like motion sensors that shut down the kitchen oven while the family waited hungry in the living room for dinner, or lights that went off if you didn’t move enough while watching TV, estimated energy-cost savings were just 12 kronor ($1.40) a month.

“The more things you connect the more risk of confusing consumers,” Brockmann said. “The solution has to be a common ecosystem, communication standards that are safe and aligned.”

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