Reassessing the smart speaker strategies of Baidu, Ali and Xiaomi

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Smart speakers may be the most ferocious track in the past two years.

2017 is still the keynote of “the first year of the outbreak”, with hundreds of brands competing for the market in just half a year. It’s a pity that the entrepreneur’s capital story has not been finished yet. Ali and Baidu, which are fighting for subsidies and price wars, have entered the market one after another. Smart speakers have completely become the main battlefield of Baidu, Ali and Xiaomi.

According to the forecast of the data analysis agency Canalys, the number of smart speakers in China is expected to be 59.9 million by the end of 2019, which is close to the critical point of sales of 69 million units estimated by “Jiazi Light Years”. It may not take a quarter to fill the gap. Following Everett Rogers’ “Innovation Diffusion Theory”, smart speakers have bid farewell to the fate of “flash in the pan”, are accelerating their acceptance by most consumers, and will penetrate the entire market at full speed.

Somewhat subtle is that under this great situation, Baidu, Ali, and Xiaomi’s attitudes towards smart speakers have released different signals, and have turned to different focuses strategically.

Ali gradually focuses on “smart life”

At the Yunqi Conference that ended not long ago, Ali Artificial Intelligence Lab launched two smart speakers, one is a screenless version of the Tmall Genie IN Candy, priced at 199 yuan; the other is a screen-enabled smart speaker Tmall Genie CCL. , priced at 499 yuan.

With the high maturity of the smart speaker industry chain, the hardware cost of a screenless smart speaker is already around 100 yuan, and the price of a screen smart speaker is generally around 400 yuan. Ali did not pursue excessive brand premiums, but also began to try to get rid of the tactics of “losing money”.

Judging from the sound volume of the entire Yunqi Conference, the weight of the keyword “family brain” is much higher than that of the two new products. The so-called “family brain” can be regarded as the home version of Ali’s city brain. It builds a family center around hardware ecology, content and services, and will cooperate with the Quzhou Municipal Government of Zhejiang Province in 10 future cities.

Thinking of Ali’s new round of structural adjustment in June this year, Tmall Genie, Ali Literature, Ali Music, UC, etc. are included in the innovative business group, Ali’s smart speaker strategy may have turned to “smart life”.

Ali has always had strong strategic adjustment and execution capabilities, and is good at building differentiated competitive advantages through conceptual strategic interpretation. Ali Planet, which also belongs to the innovative business group, is an example. In 2016, when NetEase Cloud Music rose strongly and Tencent Music was the best in the world, Ali Music, which could not compete head-on in terms of copyright and original music, immediately launched a program covering the entry of stars, Ali Planet, which covers music audiovisual, fan circle, entertainment consumption, behind-the-scenes music transactions, and entertainment marketing, is trying to redefine the music market with a concept that is more diverse than online music.

Now in the field of smart speakers, Ali seems to be planning a strategic curve similar to Ali Music. For example, the rapid growth of Xiaodu smart speakers since 2019 may not be a good signal for Tmall Genie: with Baidu’s resource investment and product growth rate, how should Tmall Genie carry out strategic checks and balances, and how to strive for sufficient resources internally support? For a time it was an unsolved answer.

At Shanghai Fashion Week a few days ago, Li Jianye, chief designer of Alibaba’s artificial intelligence laboratory, replied: “We think Tmall Genie is not a smart hardware.” The implication is that Alibaba seems to be focusing on the empowering value of voice interaction technology, linking Ali ecology has formed a larger business network, but at the same time, it may also mean that Ali has begun to turn in the competition of smart speakers.

On the one hand, the B-end attributes of Alibaba Artificial Intelligence Laboratory are becoming more and more obvious. At this year’s Yunqi Conference, it focused on products such as food delivery robots, and successively launched industry solutions such as smart hotels, vehicles, and educational materials; on the other hand, AliGenie gradually began to carry Ali’s business scenarios, in addition to speech recognition and information analysis and processing. In addition to the functions, AliGenie also integrates’s takeaway service, as well as Taobao and Tmall’s online shopping functions.

If the efforts of the two dimensions are linked together, on the issue of smart speakers, Ali has returned to the layout of a big ecology and a big strategy. More possibilities beyond smart speakers.

One of the few side effects is the right of Tmall Genie. As an “assist” role in Ali’s smart life strategy, once Tmall Genie begins to weaken in terms of shipments, it cannot rule out the possibility of completely turning to interactive systems and connection hubs.

Xiaomi rushes to build a “defense fortress”

Among the three BAM giants, Xiaomi has the most tangled attitude towards smart speakers.

In the midsummer of 2017, Xiaomi, which “does not rely on hardware to make money”, launched an AI speaker of 299 yuan, which once broke the bottom line of the price of smart speakers. But when Ali and Baidu entered the market and heavily subsidized the game, Xiaomi did not choose to follow up and continued the previous pricing strategy.

There has always been a story circulating in the market: when the price war of smart speakers was at its most intense, Xiaomi’s sales took the initiative to cut prices, tying the 169-yuan Xiaoai mini with the 99-yuan Tmall Genie, but it was immediately rejected by the head of Xiaomi’s smart hardware department. Manager Tang Mu called for an emergency stop. Legend has it that Lei Jun’s instruction to smart speakers is to “spread the road and win with quantity”. Although it is possible not to make money, it must not lose money.

The reason is not difficult to understand. At that time, the future of smart speakers was uncertain, and Internet giants were used to grabbing the entrance regardless of cost. As the largest domestic manufacturer of smart hardware, Xiaomi is naturally not so eager to enter the IoT. There is no need to compete with Baidu and Ali for dominance. The strategic height of smart speakers in Xiaomi may not be comparable to Baidu and Ali.

The turning point occurred in October 2018. Xiaomi launched a 49-yuan Xiaomi Bluetooth speaker at the press conference in the Forbidden City. Although the product positioning is relatively basic, it is fortunate that the price is attractive enough. As for the reason, you can learn from Tang Mu’s words: “Suppose Xiaomi has become the world’s largest IoT platform, but has not launched its own smart speakers. Then in the battle of smart speakers, friends and businessmen will get the vast majority of Market share. Users can control Xiaomi’s IoT smart devices through smart speakers of other brands.”

In the final analysis, Xiaomi’s strategic focus on smart speakers seems to focus more on “smart home ecology” rather than “smart voice interaction technology”. To put it simply, Xiaomi expects to connect various home appliances through smart speakers to form a smart home life ecology, not content services and life services provided by smart voice technology. The latter is more imaginative and competitive, but also requires stronger technical capabilities and content support.

Xiaomi’s efforts in smart speakers are ultimately to defend the moat of IoT. If the deduction continues according to this logic, once the “friends” harvest the smart speaker market, it only needs to block Xiaomi’s smart devices in function, which will be an unbearable blow to the Xiaomi ecological chain.

However, in the depths of Xiaomi’s heart, what is demanding is the hardware strategy, and the desire to control the underlying operating system of the IoT is not strong. There are two examples that can be proved. One is that Xiaomi has allowed some Mijia products to connect to Tmall Genie, which does not rule out the possibility of “turning enemies into friends” with Ali and Baidu in the future; In version 0, the first adaptation is still the mobile phone, not the smart speaker.

Therefore, Xiaomi has been very calm in the domestic smart speaker competition, and has kept its top three positions unhurriedly. There is a high probability that Xiaomi will have a retreat. If the central control hub of the smart speaker cannot be obtained, at least there are many products of the Mijia ecology, which cannot be the core hub, and can also be used as a branch node in the smart home.

So to a certain extent, the main opponent of Xiaomi smart speakers is not Ali or Baidu, but traditional home appliance manufacturers who are seeking innovation. In the hesitation process of traditional home appliances about whether to develop self-developed voice technology or connect to a third party, it is also a critical period for Xiaomi to clarify the strategic direction of future smart speakers.

Baidu takes the lead in verifying “business closed loop”

Tmall Genie has the protection of Ali’s “family brain” strategy, and Xiao Ai can move to the upstream and downstream industries of smart home. Xiaodu needs more determination and courage in this smart speaker war.

Baidu’s technical genes have largely established Xiaodu’s leading edge, and intelligent voice interaction is also in line with Baidu’s big channel: Baidu search has moved from a single network presentation to box computing, intelligent applet, etc., intelligent voice The output can enrich the diversification of services and complete the online closed loop with a shorter path.

It is true that smart speakers conform to the evolutionary logic of Baidu’s business model, and are also pragmatic in strategic choices. Ali and Baidu’s different positioning of smart speakers is an example.

Before Ali gave the positioning of “Tmall Genie is not a smart hardware”, Jing Kun, the head of Xiaodu’s business, also answered that “smart speakers are no longer speakers”. However, Ali’s positioning is mostly based on the needs of a grand strategy, while Baidu focuses on the number of smart speaker skills used. For example, Xiaodu’s third-party skills have surpassed music and long videos to become the largest application. There is no right or wrong in such a strategy, but it determines the different trajectories of the two.

What makes Baidu gratified is that in the data released by the research agency Canalys, Xiaodu speakers’ shipments in the second quarter of this year increased by 3,700% year-on-year, once again winning the Chinese smart speaker sales champion, and surpassing Google to become the world’s second largest smart speaker. manufacturer.

The most mentioned reason in the past is Baidu’s subsidy strategy on smart speakers, but Jing Kun said in an interview with the media that in the past year, several small and medium-sized products have undergone staged price increases, and they still maintain the momentum of rapid growth. Among them, “word-of-mouth recommendation” has become the first factor for users to purchase.

It is rumored that after Xiaodu’s shipments won the second place in the world, Jing Kun said in an internal speech: “Success is not today, success begins today.” remains cautious.

At present, Baidu’s corporate level is still facing a lot of challenges. As an emerging business, smart speakers also need to coordinate strategically with the company’s main channel to provide new internal power: on the one hand, it must grow rapidly to maintain a leading market position, and on the other hand To verify viability in commercialization. Correspondingly, at the Baidu Developer Conference in July this year, Jing Kun announced the first commercialization plan of the smart speaker industry: Xiaodu VIP membership, paid skills and brand skills.

Referring to a data mentioned by Jing Kun in an interview with the Financial Times, Xiaodu smart speaker users use the frequency up to 20-30 times a day, and the average usage time is about 2 hours, and it is still rising rapidly. Compared with the data in Tencent Music’s prospectus, it has “time-killing” products such as QQ Music, Kugou, Kuwo, and Quanmin K Song, and the average daily use of the market by users is only 70 minutes. The Xiaodu smart speaker, which dominates the user’s time, obviously does not lack the soil for commercialization.

One month after the launch of Xiaodu VIP members, the platform’s paid penetration increased by 10 times, which preliminarily verified the commercial value of Xiaodu smart speakers. Especially in the IDC report, the sales volume of Xiaodu smart speakers with screens ranked first in the world in the first half of 2019, with a market share exceeding the sum of 2-5. When smart speakers with screens are already an industry consensus, the commercialization of Xiaodu is good news.

Objectively speaking, the growth rate of Xiaodu smart speakers far exceeds that of friends, and there is no lack of the possibility of a market pattern of “Baidu + others”. After all, in addition to the search field, Baidu has not enjoyed the dominant market share for a long time, and smart speakers are naturally an opportunity worth fighting back.

The “law of the jungle” for smart speakers

Whether it is Baidu, Ali or Xiaomi, these veterans in business games are undoubtedly smart people. In the strategic transformation or not, after all, it is determined by interests.

Only from the current point of view, Ali, Xiaomi, and Baidu have a certain prototype for the business positioning of smart speakers.

Tmall Jing seeks to realize its own value under the “HOME” in Mr. Ma’s “3H strategy”, and uses the “family brain” to improve and enrich more family scenarios that Ali can touch; Xiao Ai is free from pure hardware The identity of the intelligent central controller is still hovering, which to a certain extent depends on Xiaomi’s own judgment on how long the mobile Internet era will end. Compared with AM, which can “hide”, Xiaodu must “stand up”, not only To prove that technology determines the effective growth path of user experience, it is necessary to use a set of successful business models to inject a shot in the arm for the future development of the industry and AI.

In the Internet’s consistent “law of the jungle”, survival of the fittest is the most basic attribute. Faced with the rapid offensive of Baidu’s smart speakers, Ali and Xiaomi need to maximize their innate advantages and find the most economical countermeasures. It is a correct choice to avoid direct competition in the frontal battlefield and to contend in the form of ecology.

Perhaps there is another possibility. Baidu used the “smart ecological chain” trump card on the battlefield of smart speakers to completely break through the defense lines of Ali and Xiaomi, and then continued to widen the gap in shipments and surpassed the market share of 50%. % level, so that the pattern of “Baidu + other” is copied from search to smart speakers. The premise is that Baidu cleverly concentrates all its advantages on smart speakers and finds an effective attack path.

For a period of time before this, the differentiated route of Baidu, Ali and Xiaomi will still be the norm for smart speakers.

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