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Last Updated: Thursday, 2 October, 2003, 07:28 GMT 08:28 UK
Dyson's domestic dilemma

By Emma Clark
BBC News Online business reporter

BBC News Online meets James Dyson, the inventor who wooed the "promiscuous hearts of the consumer" with his transparent, bagless vacuum cleaner.

James Dyson's London townhouse is a model of Spartan elegance - wooden floors and vast empty spaces.

James Dyson
James Dyson relaxing at home
Somehow the absence of carpets proves oddly disconcerting when meeting the man who shook up the dusty world of vacuum cleaners with his "cyclone" technology.

Fifteen years in the making, Mr Dyson's cleaners stormed British homes in the 1990s, despite retailing at almost double the price of more established brands.

"Dyson really revolutionised the entire market," says Nick Platt, a vacuum cleaner expert at retail audit group GfK. "They changed the nature of the product into an aesthetic lifestyle product, a status symbol."

Even Number 10, Downing Street, was not immune - a Dyson cylinder cleaner was seen gracing the red carpet in 1996 hours before a head of state trod its pile.

In March of the same year, Dyson climbed up the league tables to become the top brand in total floorcare, in terms of value and volume, beating appliance giants Hoover and Electrolux.

'Not that intelligent'

Small wonder Mr Dyson considers himself a British success story.

"I have made hundreds of mistakes and I'm honestly not that intelligent," he says. "But I am very passionate about making the product and getting people to buy it."

Dyson's latest launch: Telescope vacuum cleaner, which can be compressed and stored in a small space
Sea Truck: a flat boat capable of high speed (designed with Jeremy Fry)
Ballbarrow: a wheel barrow with a ball-shaped wheel for added stability
Dual Cyclone vacuum cleaner: uses two cyclones to separate rubbish from air
Contrarotator: washing machine with two drums rotating in different directions

It is this projection of innocent naivety and entrepreneurial verve that seem to have endeared him to the British public.

He battled doggedly for 15 years to transform his design for a cyclone-powered vacuum cleaner into a real product.

"It was the toughest period of my life - I had to maintain my belief against total negativity," he recalls of his attempt to get other manufacturers to license his design.

"But it worked inversely. I became more convinced that I could compete against them."

Similarly, his successful legal battle against Hoover for patent infringement in 1999 boosted his appeal as a champion of the corporate underclass.

A bad example?

However, in recent times, the Dyson fairy tale has encountered the cold winds of change and cynicism.

The company has attracted flak for shipping British jobs to Malaysia, inspiring Roger Lyons of the Amicus union to describe it as "a desperately bad example to rest of the [manufacturing] sector".

Mr Dyson retorts: "Nothing he could say would annoy me at all."

He also argues that Dyson has created 100 new jobs in R&D to counteract the 60-70 eliminated in August, following a decision to shift the manufacturing of his washing machines to Malaysia.

In 2002, an additional 560 jobs were lost when production of the vacuum cleaners was moved to the Far East.

The criticism he received still rankles. "I have never received a penny from the government in terms of grants.

"I've borrowed heavily from Lloyds [Bank], I've created 13,000 jobs and I've paid 100m in tax."

However, the furore over Malaysia - and any collateral damage to Dyson's "British" brand - masks a more insidious threat.

The company's transfer to the Far East will locate its manufacturing closer to its suppliers, but Mr Dyson admits that slower growth and rising costs have partly motivated the move.

"It is no secret that our profits are being heavily squeezed," he says.

Loyalty drops

Although Dyson is still the leading vacuum cleaner brand in the UK, it is beginning to lose out to cheaper machines that have copied its bagless technology.

James Dyson with one of his vacuum cleaners
Dyson has beaten the giants to become the top UK brand
Pick up an Argos catalogue, and you will find an upright Dyson DC04 for 177, while a Morphy Richards 73310 Ultralite Cyclone Bagless Cleaner sells for a mere 68.

Retailers such as Currys and Comet, which control 40% of the electricals market, have been driving down prices across the board.

The dilemma Dyson faces is dropping its own prices or reinforcing the power and quality of its brand.

Unfortunately, the loyalty of Dyson's customers has also dropped off.

The company's market share by volume has decreased from a third to a quarter over the last five years, according to GfK figures.

Do or die

Nevertheless, there is no shortage of Dyson die-hards.

In a BBC News Online vote for Britain's best entrepreneur, Mike Clarke, UK, emailed: "For as long as I can remember, every brand of vacuum cleaner has always been called a 'Hoover', but a Dyson is always a 'Dyson'."

And to provide a little perspective, two-thirds of Dyson owners go on to buy another Dyson, says GfK's Mr Platt. This is double the rate of its nearest competitor.

Dyson Telescope vacuum cleaner
Telescope is Dyson's latest launch
The company is also working on 175 new inventions - the latest of which is the "Telescope" vacuum cleaner, which can be compressed for storage.

Mr Dyson firmly believes that investment in new technology is the only way to keep ahead.

"Reinventing yourself is a fragile thing," he says. "You can't prove it's going to be a success, but if you don't do something new, you will die."

If he can weather the promiscuity of the UK consumer, it will certainly be a motif to live by.

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