Dyson Is the Apple of Appliances (and Just as Secretive)

Dyson Is the Apple of Appliances (and Just as Secretive)

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Not many consumer electronics brands would spend almost two decades — and tens of millions of dollars — building a vacuum cleaner that retails for more than a top-of-the-line laptop.

But combining an almost obsessive eye for design and engineering, the privately held Dyson has cornered the nonglamorous market of high-end vacuum cleaners, lights and hair dryers — and in the process bucked the technology truism that companies rarely make money in the difficult arena of hardware.

Even as other hardware brands like Samsung, the smartwatch maker Fitbit and the camera designer GoPro have struggled with physical products because of low-priced copycats and thin profit margins, Dyson has shown an uncanny ability to mint money. Its latest robot cleaner, which is selling briskly, exemplifies that and puts Dyson in rarefied company alongside Apple as one of the few tech companies worldwide to consistently profit from consumer gadgets.

“It is extremely difficult to make money if you’re not in the premium segment of the market,” said Tim Bajarin, president of Creative Strategies, a tech consulting firm. “That’s what Apple and Dyson have done well — being best in breed for technology and industrial design.”

An image of Dyson’s hair dryer outside of Dyson’s headquarters, and a detail of the product from the hair science research lab.

Credit
Lauren Fleishman for The New York Times

Dyson said its pretax profits rose 41 percent last year to 631 million pounds, or $785 million, while revenue rose 45 percent to £2.5 billion, or $3.1 billion, partly because of the weakened British pound. Mr. Dyson, 69, who founded the company in 1992, is worth about £5 billion, or $6.2 billion.

The company, with 8,500 employees split mostly between Britain and a factory in Malaysia, is growing rapidly in China, where the country’s emerging middle class remains eager to spend on designer goods, including expensive vacuum cleaners.

“Asia is a huge growth area for us,” said Max Conze, Dyson’s chief executive, who joined from Procter & Gamble in 2010. “Five years ago, 85 percent of what we sold was corded vacuum cleaners. Now, more than 80 percent comes from new products.”

Dyson is indeed moving beyond vacuum cleaners, hair dryers and air purifiers. The company said it would spend more than $2 billion on battery technology, machine learning and other high-tech wizardry to create new products, many of which remain under wraps behind tight security at its headquarters.

The developments may include an electric car. Dyson bought an American battery start-up in 2015, secured a hefty British government grant last year to develop the vehicle concept and hired executives from Tesla and Aston Martin. Dyson officials deny that they are making an electric car.

“We’re still heading into new areas where companies are well established,” said Jake Dyson, 44, the founder’s elder son, who rejoined the company in 2015 and is the most likely successor to his father. “We’re not afraid to try and beat them.”

As with any company synonymous with James Dyson, it’s often hard to separate Dyson the man from Dyson the brand.

Tall, bookish and with a penchant for designer glasses, Mr. Dyson trained as an industrial engineer and dabbled in building things like boats and wheelbarrows before settling on vacuum cleaners by the late 1970s.

Sir James Dyson, who founded the company in 1992, is worth about £5 billion, or $6.2 billion.

Credit
Lauren Fleishman for The New York Times

Frustrated with how his existing machine worked, Mr. Dyson reused technology that mirrored how a cyclone forcefully sucked wind from its surroundings, eventually spending 15 years — and building more than 5,000 prototypes — before releasing his first vacuum cleaner in 1993. He initially licensed the designs to companies in the United States and Japan, but eventually decided to build the machines himself.

“When we launched it, we were slightly terrified,” said Mr. Dyson, who had mortgaged his home and used his life savings to fund the project. “I’m not a businessman. I didn’t start a business, I started with an idea.”

His professorial look, complete with cut-glass English accent, belies Mr. Dyson’s ruthlessness. When competitors like Hoover and Samsung copied his ideas after his vacuum cleaner hit the market, the entrepreneur fought, and won, costly patent lawsuits, and instilled an “us versus them” attitude that still permeates the company.

At Dyson’s headquarters — chosen for its proximity to Mr. Dyson’s original workshop — employees remain tight-lipped, even among themselves, about their projects. During a tour of the company’s facilities, prototypes were covered in tarps while large areas of the open-plan offices were off limits. graphs of engineers’ computer screens were prohibited, and machinery in some of the research labs was obscured with black trash bags.

“It’s a little like a brainwashing atmosphere,” said Mario Cosci, an electronic engineer who joined Dyson six years ago. “When you work every day with people who are driven, you can’t swim against it.”

Not everything Dyson has tried has turned to gold.

In 2000, the company released a washing machine priced at £1,000, or double the cost of rival products. Despite positive reviews, Dyson pulled the plug five years later after failing to turn the machine into a profitable business. Now, the original washing machine prototype stands unloved in a corridor in one of Dyson’s research buildings.

At many publicly listed companies, such a failure might have cost people their jobs. But at Dyson, where 14.5 percent of annual revenue is earmarked for research and development, engineers took the mistake in stride and began diversifying into other products.

For Steve Courtney, head of Dyson’s new products unit, that included moving into cordless vacuum cleaners in 2005, even though analysts said the machines would hurt sales of the company’s corded products. It also meant releasing bladeless fans four years later that borrowed heavily from Dyson’s existing vacuum technology — the product range was later extended to internet-connected air purifiers.

Advanced design engineer Laura Howard in the hair science research lab at Dyson’s headquarters.

Credit
Lauren Fleishman for The New York Times

And when the company began selling $400 hair dryers last year, its mostly male engineering team not only learned to professionally blow-dry hair to understand how rival products worked, but also again copied the battery, motor and fan technology from Dyson’s existing products.

“We may go through a lot of pain and it may take a lot of time, but then we can transfer what we develop into something completely new,” Mr. Courtney said. “We need big new areas, new markets.”

Dyson’s ambitions have raised some eyebrows, particularly after it bought Sakti3, a Michigan start-up specializing in so-called solid state batteries, for $90 million in 2015. This technology could be more than three times as powerful — and significantly safer — than batteries used now in smartphones and electric cars.

Mr. Dyson later claimed his company would invest more than $1 billion by 2020 to figure out how to mass-produce these solid-state batteries, although experts question whether Sakti3’s technology will ever go beyond the lab.

“The community was surprised by the investment,” said Eric Wachsman, director of the energy research center at the University of Maryland, who is developing a rival project. “No one knows if their technology will work or not.”

Mark Taylor, Dyson’s research director, said the company was committed to making the battery technology work.

None of this is stopping Dyson’s long-term planning. At the modernist campus of Imperial College London, Andrew Davison, a computer vision expert, has worked with Dyson on a £5 million research project aimed at helping robots better interact with the world around them. (Dyson separately sponsors a Design Engineering School at the British college.)

Mr. Davison, an Imperial College professor, already helped Dyson build the computer vision used in its robotic cleaner. His team is now combining that technology with machine learning and artificial intelligence so that one day, the company’s products may navigate the real world, just as its autonomous vacuum cleaner now scuttles around people’s houses.

“We’re looking really far out,” Mr. Davison said. “Most of the work that we do is years away from being in an actual product.”

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