Miele prepares for battle over the machines of tomorrow; The electricals giant is thinking of customers’ needs beyond just apps and remote control

Miele prepares for battle over the machines of tomorrow

The electricals giant is thinking of customers’ needs beyond just apps and remote control

Miele, a German business that is still in the private hands of the two families that founded it in 1899, focuses solely on high-end domestic appliances.

By Matt Warman

8:00PM GMT 16 Feb 2014

In Canary Wharf’s cathedral-like East Wintergarden, the man behind the London 2012 Olympics closing ceremony was busy choreographing acrobats and dancers in a new show. But it was not human sporting endeavour that was being celebrated by Kim Gavin. It was the launch of a new washing machine by Miele.

It came just weeks after Samsung announced that it would use Europe as the test bed for its own radically redesigned new model, replacing all buttons with a touchscreen, and claiming it would deserve a place in the centre not of the kitchen, but of any living room. The battle of the washing machines has begun.

These white goods are, however, only the first pawns in a war for the internet-connected home: last year South Korean giant Samsung launched a fridge powered by Google’s Android mobile phone software, while LG has already unveiled a system that lets users text their robotic vacuum cleaner to send it racing round the home.

“We believe our new WW9000 washing machine will change the way laundry appliances are perceived within the home,” said Russell Owens, Samsung UK’s head of home appliances. “In much the same way as refrigerators have become an extension of people’s interior design, we see this following suit.”

Miele, a German business that is still in the private hands of the two families that founded it in 1899, takes a slightly differing approach because it focuses solely on high-end domestic appliances. But its current owners, Dr Markus Miele and Dr Reinhard Zinkann, have no doubts that they, too, must grapple with the homes of the future.

Samsung’s WW9000 and Miele’s W1 will each cost around £1,600 — and that top end of the market wants tomorrow’s technology today. It’s not, however, unquestioningly keen on apps and touchscreens.

“Ultimately, you have to look at what’s really the consumer benefit,” says Dr Miele. “When you look at the connected appliance, does it really make sense to start it from your office when you still have to manually load and unload it?”

He claims the real opportunity lies not in apps and remote control — even though Miele introduced the first iPhone-controlled washing machine — but in a more sophisticated approach to what the smart home may yet be about.

“Interconnected appliances offer a broader range of benefits,” says Dr Miele. “We have a function called ‘smart start’ — for instance, when you load a washing machine after lunch and you want to it be ready by 7am tomorrow. The machine looks for the cheapest energy from your energy company and does it at 3am. The intelligent usage of energy is interesting; interconnected doesn’t necessarily just mean you can start from somewhere else.”

Dr Zinkann argues that washing machines and domestic appliances in general will continue to be long-term buys. The company designs its machines to last 20 years, and recently featured a couple who had been using the same model for 30.

Other manufacturers, however, are increasingly taking the view that televisions should at least be upgradeable, as technology is moving faster than the typical seven-year replacement cycle. While white goods operate on a far longer timescale, and are typically replaced only when they break down as more of them now use sophisticated computer processors, manufacturers are hoping customers will start to upgrade more frequently.

And even if Miele has extended its 10-year guarantee to more models, the smart home is inevitable, according to almost all manufacturers of televisions, washing machines and more.

Dr Miele observes that when it came to developing their latest machines, “we saw that old people and young people are using smartphones”.

So major purchases of all sorts will inevitably evolve. “The way of controlling things should be the way people are already using it,” he says. “There has to be something that’s a real consumer benefit, such as controlling technology through an app, but if it’s a gimmick, it’s no good.”

Indeed, for now, Miele is emphasising not that its machines are radically novel. Unlike Samsung, the company’s typical customer is around 50, buying their second machine and interested in washing performance above new features.

The latest models use Nespresso-style pods to control dosing precisely, and aim, above all, to make clothes last longer. “If you think of the price tag of garments, it can be way more expensive than the machine itself,” says Dr Zinkann. Details such as design must be balanced with the fact that tastes change every few years.

So Miele, a brand praised by Steve Jobs, is left, as Dr Zinkann says, looking primarily at how to design appliances for a smart home that will on the one hand arrive in a matter of months, but will also be around for decades to come.

“We’re not afraid of competition”, he says. “Everybody loves the latest gadget, but the problem is to actually make it easier to use.”


About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: