Internet of Things (IoT) will become the biggest business ever! You can read more about it in my article; The Internet of Things (IoT) dated September 3, 2014. Many companies will try to position them self in the new market. Hitachi is one of them.
Hitachi, Ltd is a diversified company. Information and Telecommunication System segment offers system integration services and automated teller machines. Electricity System segment offers power generation systems. Social and Industrial System segment offers industrial machinery.
Electronic Device and System segment offers liquid crystal displays. Construction segment offers hydraulic shovels and wheel loaders. High Functional Material segment offers electric wires and cables. Automotive System segment offers engine management and in-car information systems.
Digital Media and Consumer Product segment offers optical disk drives and refrigerators. The Others (Logistics and Service) segment provides logistics, real estate related services. Financial Service segment offers leasing and loan services.
Japan`s $100 billion conglomerate see big opportunity in IoT and expect to earn billions in this business by 2020. Their goal is to enter this business by combining the technology capabilities of their subsidiary Hitachi Data Systems and data from millions of sensors that they already have installed in industrial equipment over the years.
Hitachi is not only trying to focus on industrial solutions but do what others are doing right now; focusing on smart cities and driverless cars. Connected healthcare systems is also a market they want to penetrate.
CEO Hiroaki Nakanishi said Hitachi need to change their business model rapidly.
Hitachi will move from a storage hardware company to a social innovation company. They will offer more IoT solutions and Nakanishi said; «We now need to commercialize these solutions to increase our revenue.»
Hitachi have what it takes to take a big stake in this market, but they need to change to a pure IoT company and try to use the sensor data they have today in their new components that they want to sell in the new market.
CEO Hiroaki Nakanishi is best known as a turnaround business leader, and Hitachi is now looking to pursue global expansion aggressively. Focusing only on becoming Japan`s No. 1 is not enough. Through acquisitions, they want to grow and be bigger in Europe, China and the Middle East.
Hitachi see big opportunities in Europe`s railway sector, and have a track record in the U.K. This is why the company is looking for more businesses to acquire and also enter into strategic partnerships to better penetrate the European market.
They recently inked an 809 million euro deal to acquire rail assets of Finmeccanica, and moved closer to its competitors like Siemens, Alstom and Bombardier in the rail signaling segment. Hitachi hopes the acquisition will help their expansion in Australia, New Zealand, India and the Middle East.
Hitachi is down -8% YTD. Market Cap is 33,33B, and P/E is 15,12. The stock Hitachi, Ltd (OTCMKTS: HTHIY) is trading at $69,00.
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