High Investment And Technology Flow: Business Experience In The Red Sea Of Intelligent Hardware

"We are being imitated all the time." On September 1, at the conference of iFLYTEK's new consumer products in 2020, Hu Yu, President of the flywheels of HKUST and director of the consumer strategy development committee, said bluntly.

Indeed, in recent years, competition has become increasingly fierce in both mature and growing intelligent hardware markets. IFLYTEK, once a leading manufacturer in the fields of translation machine and recording pen, with Sogou and Xiaomi as the representatives, iFLYTEK, with its technical capability, is facing a close fight.

"The market is full of determination. At the scene of iFLYTEK's largest conference since this year, iFLYTEK released four new products in one breath: iFLYTEK intelligent recording pen sr901, sr702, SR101, and iflybuds, iFLYTEK's first intelligent TWS headset.

"Making intelligent hardware should be the result of thinking and exploring from the three directions of technology, product and business model, and the conclusion we have drawn is that there are many products displayed at present," Hu Yu told the 21st century economic reporter when talking about the idea of iFLYTEK developing intelligent hardware. "Of course, we need to prepare for long-term investment in this market IFLYTEK also dares to invest. "

New products of technology flow

At the new product conference of iFLYTEK, the most obvious key word is "technology".

During the one-and-a-half-hour press conference, Hu Yu recalled the growth of iFLYTEK's consumer business, updated the technology accumulation and status quo of iFLYTEK externally, or Li Chuangang, vice president of iFLYTEK, introduced the new product. The dense technical data and evaluation videos were all over the audience, which made people feel the strong "science and technology students" style of iFLYTEK.

"IFLYTEK is characterized by its leading technology and has been committed to source innovation." At the scene of the press conference, Hu Yu stressed. At present, iFLYTEK's investment in technology accounts for 20% to 30% of the total revenue. From 2018 to 2020, iFLYTEK won 28 International Ai competitions.

Specific to this release of the product, but also a considerable technical flow style. According to reports, iFLYTEK's smart recording pens SR101, sr702 and sr901 are located in the entry-level, flagship level and high-end models respectively, and they all follow the four major standards of iFLYTEK intelligent recording pens: accurate identification, remote recording, clear recording and complete language.

Li Chuangang introduced that iFLYTEK's new intelligent recording pen has a recognition accuracy of 98%, and the farthest pickup distance can reach 15m. The Chinese English mixed reading recognition function can also automatically recognize the voice content mixed with Chinese and English when transcribing. At the same time, sr702 and sr901 are equipped with new functions such as off-line transcription, OCR image and text recognition, video subtitle, etc., and the accuracy rate of offline transcribing is as high as 95%.

In addition, iflybuds, the first TWS intelligent headset of iFLYTEK, was released at the same time with the three new products of iFLYTEK intelligent recorder. One of its core functions is real-time transmission of calls. One key recording can be made at the beginning of a call, and the call process can be converted into text. The accuracy rate of transcription is more than 98%. At the end of the call, it can form an intelligent summary, automatically extract the key content, and support the quick search, multi terminal sharing and editing of the call content.

"IFLYTEK has our own technology gene behind making smart headphones. Not only do we see that smart headphones are an incremental market, but we also have our own genes, namely recording, transcribing, and translating," Li Chuangang told reporters. "On the basis of the" base "of recording, transcribing and translation, the hardware forms can be diversified, and we will continue to maintain them in the future Continue to explore different forms. "

Hu Yu further pointed out that it will take 5 to 10 years for AI technology to really make intelligent voice interaction mainstream, but in the short term, AI still has application scenarios such as recording and translation in C-terminal. "Smart hardware has gone through a bubble period, but eventually it needs to return to the problem of hard demand and pain points."

Competing for the market

Intelligent hardware is indeed a field full of imagination. It is no wonder that Xiaomi, Sogou, Baidu and other technology enterprises have set foot in it.

According to the data of iimedia research, with the increase of per capita income and expenditure of residents and the change of main consumers, the consumer demand for intelligent products is increasing day by day. In 2020, the scale of China's intelligent hardware market is expected to reach 1076.7 billion yuan, that is, it will step into a trillion yuan market.

However, there are not only mature products represented by smart phones and tablets, but also growth products represented by translation pens and wearable devices. IFLYTEK aims at the growing market in the field of intelligent hardware.

In this field, although there is no such bloody price war as that of smart phones, with the gradual increase of entrants, the competition also begins to be fierce. In the past two years, millet translation machine and Sogou recorder have been launched continuously. Technology manufacturers with artificial intelligence capability are not ready to let go of any "meat flavor".

The arrival of competition also forces iFLYTEK to readjust its strategy. According to the latest 2020 half year report released by iFLYTEK, the company's intelligent hardware business revenue in the first half of this year was 501 million yuan, a year-on-year increase of 1.58%, and the gross profit rate was 49.58%, with a year-on-year decrease of 1.37%. In contrast, the gross margin of iFLYTEK intelligent hardware in 2017 was as high as 54.08%.

"It will be sooner or later for the giants to increase their weight." An industry person who did not want to be named told the 21st century economic report that "Internet giants, including Baidu, Huawei and Alibaba, have accumulated in the field of voice recognition technology. With the growing market of recording pens, these giants are potential rivals for insiders to seize the market."

The next example of iFLYTEK's failure with big speakers is not without precedent. In fact, iFLYTEK released its first smart speaker product as early as August 2014. At that time, iflybox, with a price of 699 yuan, focused on voice control and became the pioneer of smart speakers in China. However, four years later, when tmall Genie double 11, which was listed at 499 yuan, only sold for 99 yuan, and Mi speaker Mini sold for 169 yuan. When the giant entered the game and fought a big subsidy war, the speaker products of iFLYTEK had almost no trace.

In Hu Yu's view, "trial and error" in the intelligent hardware market is not a bad thing. He revealed that as early as a few years ago, iFLYTEK and China Mobile Migu group jointly developed the all voice AI earphone Mobis, but the final result was not ideal. "At the beginning, we stepped into a lot of holes in making that headset, but for today's headset, these accumulated experiences are precious wealth."

At the same time, he told the 21st century economic reporter that intelligent hardware is a market that needs long-term investment, and iFLYTEK will continue to invest firmly in it.

However, a contradiction is that sometimes "defeated" can make a comeback, but more often it is a missed opportunity. The reason lies in the fact that iFLYTEK is still facing the biggest challenge in the 21st century, no matter how large the scale of the industry's recording industry is, even if it is called the largest market segment of the 21st century. In contrast, the domestic market has delivered 45.89 million smart speakers, which were abandoned by iFLYTEK in 2019.

"IFLYTEK is still looking for more possibilities to update, but the window of opportunity is not many." According to the industry.

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