Tech In Japan: Panasonic’s Next Gen Home And Community

Summary
  • Panasonic is exploring what the next generation of homes and communities look like.
  • Logistical integration, sharing, and communication play a major role.
  • Investors can gain from innovations produced out of Japanese population problems.

Panasonic Is About Smart Homes (and Tesla Batteries And TVs)

Panasonic (TYO: 6752) is a Japanese multinational electronics manufacturer which is probably best known for its TVs to the average American consumer and its Gigafactory battery partnership with Tesla (NASDAQ: TSLA) among the investment community. In Japan, they are known to manufacture just about every piece of electronic appliance – refrigerators, air conditioners, microwaves, you name it:

Source: Panasonic Website

With the “Internet of Things” movement in full force, the Japanese giant entertained what connecting everything to everything would look like for the future home. Titled “Wonder Life-BOX”, this experiment was launched to envision the home of 2020~2030. Roughly translated, the experiment outlines a bright picture of all the opportunities that Panasonic has in front of them – automatic curtains, intelligent mirrors, smart kitchen, etc.

The Future Of Home Appliances

In another light, the futuristic home may be a threat to Panasonic’s home appliance business. The home of 2030 in this experiment is highly connected and logistically integrated to… everything, and a home that is “too connected” lessens the need for many appliances. This can partially be seen by Amazon’s (NASDAQ: AMZN) Dash buttons. We push a button, product is at the door. Recent supply chain developments seen in manufacturing are extending to our homes. We are no longer talking about “Just in time” car parts, but just in time laundry detergent, caesar salad, and maybe even dress clothes. So if our caesar salad shows up in 15 minutes, do we really need a refrigerator? Or if we can throw our dirty laundry into a bin that automatically takes it to the community wash, do we need a washing machine? (Our washing machines sit idle most of the time anyway, so we might as well share it).

Now, what exactly did Panasonic explore through this experiment? Here is a 5 minute clip that gives us an idea of what the 2020-2030 Panasonic home looks like:

Keep in mind that the experiment was just that: An experiment. None of what appears in the video has been developed or commercialized by Panasonic yet, but it gives us a glimpse into what they have in mind for the future.

The Future Of Communities – Sharing, Communication, And AI Assistance

The operating assumption for the next generation home involves a well developed logistics infrastructure. That entails deliveries happening at the right time, in the right quantity, and at the right location – basically bringing your Toyota (TM) supply chain strategy to the average consumer. This facilitates sharing many resources, like washing machines, closet space, and refrigeration space, among other things.

More importantly, Panasonic introduces “Akari-chan”, our AI partner. By every description, Akari-chan is a household manager and a personal secretary. She keeps track of your home condition, electricity usage, package deliveries, etc (household manager things) while making fashion recommendations, suggesting cooking recipes, and providing traffic/weather news (personal secretary things).

So why is Akari-chan more important?

Mr. Yamazaki, the community designer for the Wonder Life-Box experiment, noted that many of the next gen community and home features were designed with the elderly population in mind. His approach to elderly community design covers more than the immediately obvious tech applications like health and location monitoring. Rather, the second level of community design facilitates an enjoyable and interactive living space. The idea starts with acknowledging that we stay home as we grow older (and weaker). Then builds the idea by figuring out what energizes an elderly person.

Ryo Yamazaki, Community Designer for Wonder Life-BOX

Source: Panasonic

One example of Mr. Yamazaki’s design is the “Doma”. Doma, a Japanese word for “dirt space”, is an area typically located at the entrance of the house. Traditionally, Japanese folks take off their shoes before entering the house, but the Doma is the one area of the house where shoes are accepted.

Here is a picture:

Doma is the tiled area. Shoes are taken off before walking on the wooden floor.

Source: E-ie.co.jp

As you might have guessed from the picture above, the Doma is an area typically used to have a quick chat with guests over tea. Instead of taking their shoes off and entering the house, people can make a quick stop to say “hi” and chat for a few minutes before they go on with their day. Since elderly people generally stay home, creating a Doma that pulls family and friends into the house ought to energize the elderly.  A nifty little tech application that Mr. Yamazaki mentioned was a function where Akari-chan projects product information on the Doma wall.

For example, you can take a bottle of liquor from your collection and share a drink with your old friend. Your old friend likes the drink, so you place it on the Doma table and the product information would appear on the wall, showing what the product is, where it came from, when it was produced, what the connoisseurs think of it, etc. Akari-chan may even tell you where it is available for purchase. Nothing revolutionary, but a very Japanese tech application that tickles the heart.

Investor Takeaway

The immediate benefits of a smart home and community are more or less obvious: It helps to monitor electricity usage, health indicators, package deliveries, etc. Panasonic takes this concept a step further. The second level benefits of the smart home and community comes through exploring the middle ground between technology and humans- different ways that technology can enrich a human’s life, particularly at the emotional level.

It is no secret that Japan is facing a population problem. As the nation grows older, fewer young resources are available to care for the older generation. That forces Japanese companies to figure out ways to apply technology to better care for the elderly. In terms of the smart home and community developments, that means heavy logistical integration, more sharing, and more communication.

Japan leads the way to an aging population. Much of Europe follows Japan closely, especially countries like Italy, Greece, and Germany. The bad news is that nobody really knows what to expect when dealing with an aging population. The good news is, Japan is the first to learn the lessons, and the lessons can probably be applied to other countries. Panasonic’s smart home and community of the future is likely to at least revisit the idea of retirement homes. It will serve investors well to stay informed about the developments in Japanese smart homes and communities to have a feel for what to expect out of the senior care industry outside of Japan in the future. Japan, a well-educated first world nation, is taking on the challenge and we can expect to see more than a few useful innovations. That said, they also produced stuff like this:

Source: Complex.com

Caveat emptor!

Author: Clayton Young

Hi! I'm Clayton. My value investing journey began in 2012 during my college days. It was not until recently (2016!) that I decided to leverage my Japanese language skills to research Japanese equities. I hope to provide valuable insight on Japanese companies to the English-speaking world through this blog!

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