LG전자가 ‘UP가전 2.0’으로 가전 제조 중심에서 서비스·구독 중심의 스마트홈 솔루션 사업자로 거듭난다. UP가전 2.0의 핵심 골자는 △가전 특화 AI칩(DQ-C) 및 OS를 통한 초개인화 △제품 케어십 서비스를 비롯한 가사 관련 O2O(Online to Offline) 서비스 연계 △자유로운 서비스 기간, 범위 선택을 통한 구독 사업 등이다.
▲LG Electronics H&A Business Division President Ryu Jae-cheol
Product → Service-centered expansion… Housekeeping liberation becomes a reality
‘Home Appliance Hyper-Personalization’… Equipped with AI Chips and OS for Home Appliances
O2O service connection… Smart home solution business development
Start a subscription business combining products and services
LG Electronics is transforming from a home appliance manufacturing company to a service and subscription-oriented smart home solution provider with 'UP Appliances 2.0'.
“LG Electronics will expand its service-based business beyond manufacturing competitiveness through ‘UP Appliances 2.0.’ We will launch the ‘Smart Home Solution’ business with the goal of ‘increasing the value of life through housework liberation’ through hyper-personalization of smart home appliances, serviceization of the household sector, and subscription business.”
LG Electronics H&A (Home Appliance & Air Solution) Business Division President Ryu Jae-cheol said this at a press conference held at LG Science Park in Gangseo-gu, Seoul on the 25th. At the event, LG Electronics unveiled 'UP Home Appliances 2.0' and demonstrated the service subscription method by directly introducing the product.
The core points of UP Home Appliances 2.0 are: △Hyper-personalization through home appliance-specific AI chips (DQ-C) and OS, △O2O (Online to Offline) service linkage related to household appliances including product care service, and △Subscription business with free service period and scope selection.
■ UP Home Appliances 2.0, AI Chip for Smart Home Appliances and Home Appliance OS Equipped LG Electronics unveiled its self-developed AI chip for smart home appliances, the 'DQ-C' chip, and its home appliance OS. The DQ-C chip can configure an LCD display, allowing customers to conveniently upgrade or delete functions on UP home appliances, just like easily installing and deleting smartphone apps.
Ultimately, this is an explanation that will enable us to achieve hyper-personalization of home appliances. President Ryu said, “It can be applied to popular products as well, and will greatly contribute to the further evolution of smart home appliances.”
The DQ-C chip is equipped with an AI processor, which improves the processing performance of deep learning algorithms, and also increases the accuracy and processing performance of voice recognition and AI control. The person in charge said, “DQ-C is an AI chip with improved processing speed and memory due to the AI function installed in the existing MCU. However, it will only be used in home appliances.”
President Ryu also said, “Home appliances are price-sensitive, and the DQ-C chip does not have high specifications that would increase the unit price, but it can satisfy performance while maintaining existing price competitiveness.” This explains the reason why “there are no plans to raise the prices of UP Home Appliances 2.0 products for the time being.” However, he added, “There are some areas where this may change in the future.”
The home appliance OS will first be applied to washing machines and dryers that will be released as UP Home Appliances 2.0 on the 25th. It will be focused on premium products first, and will be expanded to popular models next year.
Regarding existing 1.0 customers, President Ryu said, “UP Appliances 2.0 has the same starting point as 1.0, but 2.0 is specialized for personalization. There are limitations in applying the functions of UP Appliances 2.0 to the existing 1.0 performance, but we will continue to provide it in the form of content as much as possible.”
■ Transition to a subscription business combining products and services
▲ UP Home Appliances 2.0 washing machine and dryer products on display LG Electronics is expanding its home appliance business portfolio to a service-based business, shifting the home appliance industry trend to HaaS (Home as a Service).
Currently, subscriptions are available for four products on the LG Electronics website: washing machines, dryers, air purifiers, and refrigerators. Customers can choose △usage capacity △color △usage period △service period. The service period is 3 to 6 years, and if you subscribe for 4 years or more, the product becomes the customer's property when the period ends.
For example, if you only choose the basic care service for a 21kg white colored washing machine, it costs 33,900 won per month (based on a 6-year subscription), which is 406,800 won for 1 year, 1,220,400 won for 3 years, 1,627,200 won for 4 years, and 2,440,800 won for 6 years. Rundrigo laundry service is set at 15,000 won per month after 3 months of free use, and LG Household & Health Care laundry detergent regular delivery is set at 15,000 won per month after 3 months of free use.
LG Electronics said, “We are reducing the initial purchase cost burden by selecting products that are suitable for the customer’s situation, such as single-person households and newlyweds, and are economical with a variety of product options to choose from.” A/S is provided free of charge during the subscription period, and subscriptions will be integrated with existing rentals starting from the third quarter.
Lim Jeong-su, managing director of H&A Rental Care/Subscription Business, said, “The care services provided through rentals are the same, but the addition of new affiliate services will make it more attractive to subscription customers.”
He also said, “If home appliances are converted to a subscription business, we will have to wait and see how the overall demand changes, but it will not be negative,” and “I expect the overall market size to increase as customers who were burdened by the price range will have a wider range of choices with subscriptions.”
■ Home Appliances as a Service… 6 O2O Services Revealed
▲Q&A session during a press conference held at LG Science Park in Gangseo-gu, Seoul Customers will receive housekeeping services along with the purchase of UP Appliances 2.0. The goal is to transform home appliances into smart home solutions.
Currently, there are a total of six external O2O services that can be selected: △Mobile non-face-to-face laundry (Laundrygo), △Regular delivery of detergent (LG Household & Health Care), △Regular delivery of dairy products (Milk Warehouse), △House cleaning and refrigerator organization (Housekeeper), △Item storage (Mini Warehouse Attic), △Fresh food (Dabanchan &).
LG Electronics H&A CX Director Lee Hyeong-eun said, “Affiliated companies will continue to be added, and the auto services being introduced will be based on LG products and will be developed into a more closely aligned business model in the future,” but added, “There are still many services that need to be internalized.”
LG Electronics has especially emphasized collaboration with customers, SMEs, and startups. President Ryu said, “We are creating synergy through collaboration through service partnerships, considering the ecosystem of SMEs and startups.” Managing Director Lee said, “For affiliates, collaboration with LG Electronics will be an opportunity to attract new customers, and LG Electronics’ goal is to create such a collaboration system and collaboration platform.”
Finally, President Ryu expressed his ambition, saying, “With UP home appliances becoming our mainstay, accounting for 45% of our sales, our second-half performance will not deviate significantly from the range expected by other competitors and the industry, but we will prepare well with premium products and do our best.”
President Ryu said, “We view all products and services related to the home as business areas, and we will expand our solution business area to ultimately help customers choose life.”