LG puts household appliances online

South Korea's LG Electronics Inc plans to launch home appliances that can access the Internet as early as February 2003 in Taiwan, the company revealed at a press event in Taipei last week.

Web-enabled products were on display at the event, which marked the first anniversary of the opening of LG's Taiwan branch office.

"We are introducing home networking products such as the Internet refrigerator, microwave, air conditioner and washing machine," Michael Ahn (安明奎), executive vice-president of LG Electronics said at the event. "During the first stage of the launching process, we offered our Internet products in [South] Korea, the UK, USA, Mexico, Australia, and Spain. I am very proud to say that it has been very successful."

Ahn did not release figures for the number of products sold in the first stage of the launch, but he did reveal that the resources to fund research in these new products had come from LG's success in digital appliance sales in recent years. For the past five years LG's digital appliance sales have shown an annual growth of over 20 percent, with an operating margin of 12 percent.

LG launched its Net refrigerator in the US in October with a price tag of US$8,000. The fridge can remind users when products have passed their "use-by" date, as well as letting them download music, recipes and e-mail. The second-generation model to be launched in Taiwan incorporates a camera so users can record and send video-mails.

All the new Net appliances can be operated from outside the home via the Internet. Commuters can turn on their air conditioners or washing machine from the office as they prepare to make the journey home. The retail prices of the appliances in Taiwan had not been set at the time of the press event.

Some researchers have questioned the need for the so-called "smart appliances."

"Although more products have continued to enter the smart-appliance market, it is most hampered by a lack of consumer education on how the products add value," said Cindy Wolf, an analyst with US-based market research firm, In-Stat/MDR.

"In addition, this category will likely not experience high growth rates until there are standards, higher Internet penetration rates, and lower prices."

According to In-Stat/MDR, the market for Internet access devices -- which includes computers, cellular phones and set-top boxes as well as home appliances -- is expected to grow at an overall annual rate of 28.2 percent between last year and 2006. Growth is expected to rise from about 226 million units last year to over 780 million in 2006.

Though the PC and mobile-phone segments have the most unit shipments, Internet appliances, which include Internet terminals and tablet PCs, will have the highest annual growth rate with 74.3 percent, the report said.

LG Electronics sales exceeded US$76 billion last year and are expected to reach US$185 billion this year. The company employs 90,500 people in 300 operations in over 120 countries.