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What Can the Home Appliance Industry Learn from a TV Company?

15 August, 2023 | Emir Lasic

TV set 09_AdobeStock_581190413

Vizio is a consumer electronics company that sells its TVs and sound bars dominantly in the North American market. In 2020, it launched Platform+ which is comprised of a proprietary smart TV operating system called SmartCast, and Inscape, a data intelligence service. With Platform+, VIZIO can interact with 16.1 million active SmartCast accounts, collect usage data and deliver targeted content. This enables VIZIO to no longer make profits solely by selling TV sets, but also by providing data intelligence services. Today, almost 99% of the company's profit comes from selling usage data on viewing habits and targeted advertising rather than selling hardware. 

This example highlights the potential smart/connected functionalities have when it comes to developing new business models, hence unlocking additional revenues. Today's connected/smart appliances are equipped with numerous sensors and even cameras to enable some smart functionality such as allowing you to keep the track of what’s in the fridge remotely. This same hardware can also be used to monitor user behavior. In addition to that, via smartphone app it is possible to link appliance usage data to personal data stored in the smartphone, thus identifying who is using the appliance and how. Many home appliances are also equipped with displays which could present targeted advertising.

The home appliances industry could take a similar approach to Vizio and monetize their smart appliances. 

Several questions surround this emerging market, including how long it will take for the first players to start a business model like Vizio’s and who are these going to be? Of the big home appliance manufacturers, those with large smart platforms and data collection in other markets, such as Samsung and LG, will have an advantage.

However, home automation brands such as Nest are also in a good position to use the data, along with big players such as telecom providers or big tech brands with strong targeted advertisement businesses such as Meta, Amazon, or Google. If this becomes the case, home appliance manufacturers should aim to keep an equitable share or face lost potential revenues. 

At present many home appliance manufacturers have their own ecosystems, but there are several standards which enable could enable interoperability, such as Matter. Some of the largest manufacturers are also developing the Home Connectivity Alliance (HCA) communication infrastructure that is which would enable interoperability between different manufacturers. Whether this will get in the way of data collection or enable it to progress quicker is yet to be seen.

But the biggest question circling this is how data protection and regulatory issues will be navigated in a way that allows consumers full transparency of what data is being collected and how it’s being used. The impact on product innovation and the possible effect on energy use and sustainability innovation will also present a considerable prioritisation challenge to manufacturers. 

It will be fascinating to identify if there are companies (e.g., established brands, start-ups) using (or at least introducing) similar approach to generate additional revenues. Especially, it will be interesting if any major home appliances manufacturer will present similar ideas the upcoming IFA 2023 in Berlin.

Vizio quarterly profits USD million

For further insights on market trends, analytics and industry forecasts, book an analyst meeting onsite at IFA, Berlin 2023.

This article is the second in a series of analyst commentary about the home appliance industry and related topics which Omdia expects to see at this year's IFA, Berlin. Visit the Further Reading section to read the rest of the series.

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Emir Lasic
Principal Analyst - Home Appliances, Consumer Electronics and Display Applications

With more than 15 years of research experience in the home appliances industry, Emir Lasic joined Omdia in 2022 as a principal analyst responsible for home appliances.

Prior to joining Omdia, Emir worked at MEDION as a product manager for household appliances. He was also a project manager for Germany-based wfk – Institute for Applied Research, where he was responsible for conducting research in the field of household appliances, industrial laundry machines, and textiles and detergents. Emir received his doctorate in 2014 from University Bonn, Germany. His research focus was on household appliances, consumer behavior, and sustainability.

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