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From the Perspective of Intelligent Hardware
The development of mobile Internet is changing with each passing day, new technology, new products and new patterns appear every day. Intelligent hardware is the future of the mobile Internet, the Giants of the Chinese Internet are highly recognized and in the heart of the action. Intelligent hardware through the combination of hardware and software are making huge transformations on traditional equipment, adding intelligent functions to the device. The transformation of the object may be electronic devices, such as watches, television, and other appliances, but also nonelectronic ones, such as locks, cups, cars and even houses. With these innovations, the hardware has the ability to connect, to achieve a load of Internet services, with the additional value of large data. This paper reveals the situation of China’s intelligent hardware market, with a forecast that more internet companies and home appliance enterprises will enter the market.
Market Outlook in China
The production and sales of intelligence hardware in China are increasing rapidly. According to IDC data, in the first quarter of 2015, the Mi Band, with shipments of 2.8 million and which occupied 24.6% of the global wearable devices, has been the best-selling band in China. In terms of Intelligent UAV market, DJI-Innovations from Shenzhen has accounted for about 70% of the global UAV market share.
However, from the perspective of the application, the penetration of intelligent devices is not as simple as it could be for the function of the item itself. Part of electronic devices are still in their research and development stage, where the distance is still long from the industrial promotion. We can here take the example of the intelligent car which has already seen a lot of improvement but with still limited functions such as the car park function.
A Dynamic Industry in Transition
Traditional manufacturing enterprises urgently need to adjust their businesses to advance technology and intelligent products in order to stimulate new business growth point. For example, in the market of intelligent car, most of the car makers are investing in research on tech features to boost the sales, such as FordMotor.co that is betting that a new generation of smart cars will help the firm to stand out from the market, where its actual sales are slipping currently die the rising competition. In the field of smart home, the traditional home appliance’s famous companies are also turning into smart home appliances. Besides, relying on its U + platform, Haier plans to launch a large number of third-party products such as the GE smart lighting, blood pressure meter from Lan Xin Kang, and so on.
In the field of intelligent cars, Baidu (in chinese 百度) has conducted roadmap platform’s development to achieve interoperability between people, vehicles, and cell phones. In addition, Alibaba and SAIC cooperation together started to create Internet cars. In the field of wearable devices, Mi, Baidu, and Qihoo, all have launched smart band products. In the field of intelligent home, Mi launched a smart TV, smart routers and smart socket and other products to seize the intelligent household market. Relying on WeChat (in Chinese 微信) and QQ, Tencent has also built an open platform for intelligent home.
For innovative enterprises, the intelligent hardware industry is an emerging area, with more opportunities and fewer barriers to entry the market. In the field of wearable devices, innovative companies have published related products, such as the LEAK electronic watches from Geak. In the field of smart home, BroadLink has introduced smart sockets, and at the same time, has created a DNA BroadLink WiFi solution which has been adopted by more than 80 household electrical appliance enterprises.
An Immature Market Worldwide and in China
Although the intelligent hardware industry is still a new industry with a short time development in China, due to the high degree of concern, many companies are involved in the emergence of this competitive market. However, the development of this industry is still in its primary stage, the product application service development is lagging behind with the single function. For example, China has a large number of technological companies which have released their own smartwatches, smart bracelet, and other products. As intelligent mobile phone accessories, entertainment features of smart wristbands are nothing more than exercise for activities, health and sleep monitoring, indeed, the difference between a product to another is relatively small.
In this early stage of development of the intelligent hardware market, Chinese companies need to improve the patent awareness. With the speed of change of the global science and technology, intelligent hardware will become a strategic global competition. Therefore, many enterprises in developed countries will attach great importance to these patents’ layout.
For instance, Lux, a Boston Market Research firms draw a report showing that Samsung has become the company with the largest number of patent’s applications in the field. From 2010 to May 2015, in the market of wearable electronic devices with 41301 patents created, Samsung accounted for 4%, Qualcomm and Apple ranked two and three and accounted for 3% and 2.2% respectively. Microsoft even in the absence of the release of any wearable products has paid the cost of $200 million to Osterhout Design Group to acquire a number of assets and patents related to the smart wearable devices. Though the market is not mature, the international giant has already started the competition for the patent equipment. It can be predicted that the continuous development of China’s smart wearable device industry, can lead to the creation of more and more patent’s in China. Therefore, Chinese enterprises should not only continuously explore and improve the intelligent hardware-related technologies, but also need to improve the patent awareness and strengthen the layout of the intellectual property.
The Expertise of Daxue Consulting
Daxue Consulting focuses on leveraging disruptive technologies to drive a business growth and value, whether via market entry or radical changes. Daxue has conducted several methodologies for helping a client in the home appliance industry to understand how the client could leverage the new generation of technology in China. Among the different methodologies, 4 focus groups have been held in order to have an in-depth analysis involving various household population from Shenzhen. The focus groups have been conducted among 4 different groups:
- High incomes household (exceeding 230,000 RMB annually) who didn’t know about the brand of the client
- High incomes household (exceeding 230,000 RMB annually) who already bought the product of the client
- Upper Middle-Class household inCome (from 106,000 to 230,000 RMB annually) who didn’t know about the brand of the client
- Upper Middle-Class household inCome (from 106,000 to 230,000 RMB annually) who already bought the product of the client
Through these focus groups, Daxue Consulting has gathered information to improve the client’s marketing techniques and increase its sales.
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