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KONE surged to the forefront of the elevator industry through its introduction in 1996 of the world's first commercially viable machine-room-less elevator, KONE MonoSpace®. KONE's revolutionary EcoDisc® motor at the heart of the MonoSpace® concept is so efficient and small that it can be installed inside the elevator shaft, eliminating the need for a separate machine room. This innovation has swept the market, setting new standards for performance and environmental friendliness along the way. MonoSpace® elevators bring silent, smooth-starting, gearless elevator performance to buildings previously served by noisier and less efficient hydraulic or geared elevators. Furthermore, EcoDisc® uses no oil and consumes only half the electricity of traditional elevators. By eliminating the machine room, offering energy savings, improving the ride, and reducing energy consumption KONE produced a win-win situation. Thanks to a licensing agreement for KONE MonoSpace® technology, signed during the first phase of the alliance, Toshiba became the leader in the Japanese machine-room-less elevator market, increasing its market share and stature as the third-largest elevator and escalator supplier in Japan. Toshiba's SpacelTM machine-room-less elevator, powered by KONE EcoDisc® technology, now accounts for approximately 80 percent of Toshiba's new elevator business in Japan. The exchange of technology between the companies flows both ways. KONE employs Toshiba inverter drives in its high-speed elevators for skyscrapers and other tall buildings around the world. When the 101-story Taipei Financial Center is completed, the alliance will have the fastest elevators in both Asia and Europe. The two companies have collaborated through joint R&D efforts in creating the best-performing and most environmentally friendly escalator on the market. In addition to the further harmonization of products and components, significant benefits are expected from joint marketing and procurement. A Global Alliance committee, consisting of top executives from both companies, will also promote further ways in which the two companies work together. The current agreement includes the extension of Toshiba's license to manufacture and sell elevators based on KONE MonoSpace® technology in China, the world's fastest-growing elevator market. KONE currently sells some 3,000 elevators annually in China and Toshiba about the same. KONE has one factory in China, while Toshiba has two. With total elevator sales in the country expected to grow from a current 30,000 to 50,000 units a year in the next five years, there is little risk of problems arising from competition or over-capacity. The situation in the mature markets of Europe, North America and Japan is quite different. Markets are flat or declining, and competition is becoming tougher all the time. Although the number of major competitors has declined from the days when every country had its own highly protected national elevator market, the consolidation process has not been completed. In this struggle for survival, the alliance between KONE and Toshiba takes on increasing significance. Elevator companies are struggling to establish some kind of edge for themselves, and technology innovation is not enough to guarantee success. "By creating a meaningful alliance," suggested KONE's Cawén, "we are proving that we are business innovators as well. Working together, we create value for both KONE and Toshiba clients that we could not have offered on our own. I think we are natural partners in this respect because we both have excellent track records in customer service as well as technology." Maintenance and modernization services account for more than half of both KONE's and Toshiba's revenues. KONE has invested heavily in remote-monitoring technology, based on GSM collaboration with Nokia, and maintains a global network of 24-hour service centers. The latest maintenance contracts guarantee 99.5 percent availability of equipment and use the remote monitoring capacity to detect potential problems and correct them before breakdowns occur. KONE also is a pioneer in the field of automatic building door service. KONE is the world's fourth largest elevator and escalator company with a 9 percent market share. Its greatest strengths are in Europe and North America. KONE recorded sales of $2.27 billion in 2000, has 500,000 escalators and elevators and 120,000 building doors under maintenance contract and employs over 23,000 people. Toshiba Elevator and Building Systems Corporation has a 3 percent share of the global market, sales of $87.65 million annually, and 6,000 employees. Together the two companies manufacture a total of nearly 30,000 elevators and escalators a year. When taken together, the two companies are number one in the global escalator market and are well positioned to challenge for the number two spot in elevators. Cultural differences can make it difficult for individuals from differing backgrounds to work successfully together. The same is true for companies. But when there is a deep and genuine desire to learn from one another and share the best of what each partner has to offer, these differences become potential sources of innovation. KONE and Toshiba Elevator and Building Systems Corporation have experienced both sides of this situation. Today, their strategic alliance is bringing benefits to customers around the world and helping make both companies stronger in the process. "We will continue to take advantage of this synergy and expand our cooperation wherever it will prove beneficial," concluded Cawén.
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KONE Senior Vice President Klaus Cawén reaches higher through safer and more efficient technology