How does NetEase Youdao win in the competition and upgrading of intelligent education hardware?

At the end of the 1990s, driven by factors such as the maturity of the manufacturing end and the explosion of market demand, educational hardware ushered in a period of vigorous development. The bully learning machine, the step by step high reading machine, the Wenqu star and the Haoji star have become the memories of a generation.
In the process of technology iteration, the industry has reappeared the bustle of the past.
With the continuous penetration of mobile Internet and the landing of AI technology, educational hardware has ushered in new development opportunities. Students and parents still need to rely on tools and hardware to improve learning efficiency. Intelligent education hardware has become a new outlet and attracted new players.
In addition to traditional education hardware enterprises, many Internet enterprises are also joining the board. For intelligent work light products alone, ByteDance, Tencent, Alibaba, JobHelp and other enterprises have joined the competition.
The industry is booming, but at the same time, some players choose to continue to work hard in a single category and always drive on the track of “making the long board longer”.
Recently, Youdao launched a new children’s dictionary pen. On the basis of Youdao’s dictionary pen 3 “super fast search” and “scan translation”, the new children’s dictionary pen has added content and functions for children aged 3-12 to learn English and Chinese.
Unlike other smart hardware manufacturers, which continue to expand their product categories, Youdao’s smart education hardware business still focuses on the category of dictionary pens after the release of Youdao Dictionary Pen 3.0 last year. Behind the release of children’s dictionary pen, Youdao actually provides the outside world with a view to observe the development of intelligent education hardware circuit: in a fast-growing market, what path can we better seize the opportunity? What is the smart hardware product that really meets the needs of students and parents behind the emergence of new products in the industry?
Focus on products and deepen layout
The incision of observing the industry is actually hidden in the design idea of Youdao children’s dictionary pen.
In terms of hardware design, Youdao Children’s Dictionary Pen applies ergonomic design that is more suitable for children, so that children aged 3-12 can better grasp and operate. The product material is skin-friendly and lightweight. The 1.9 inch screen and large button design are convenient for children to view and operate.
In terms of content and function, in addition to the functions of the previous dictionary pen “super quick search”, “scan translation”, English reading and scoring, AI voice assistant, etc., Youdao children’s dictionary pen fully integrates methods suitable for children’s learning needs:
In terms of content, on the basis of the original dictionary, Youdao Children’s Dictionary Pen has added Youdao Children’s Dictionary, Children’s Phonetic Interactive Dictionary (upgraded online in June), etc., to help children understand words and collocations, and improve the interest of searching words and learning English and Chinese. On the basis of the picture book, interactive point reading has added a little elephant Chinese character card, a globe, etc., which is rich in content.
In terms of functions, Youdao Children’s Dictionary Pen not only adds the function of correcting children’s frequent answers, but also helps children quickly view the analysis of knowledge points and collect wrong questions. In Chinese learning, Youdao children’s dictionary pen helps children improve their learning efficiency and interest through the combination of calligraphy and painting, interesting interpretation, as well as the functions of live reading, appreciation of ancient poems and words. In addition, the virtual monkey Matti in the dictionary will also help parents guide and encourage children and accompany them to learn happily.
In short, Youdao children’s dictionary pen is aimed at more scenario-based and differentiated needs. Youdao uses a pen to close the distance between children and learning, improving the scientific and convenient nature of learning. Behind the release of children’s dictionaries and pens is Youdao’s intention to deeply explore the needs and scenarios and further develop the strategic layout of the whole learning stage of hardware.
In 2017, Youdao targeted the intelligent education hardware industry and launched the first product “Youdao Translated Egg”. At that time, Youdao was interested in people’s special scenario-based needs for searching English words and translation, such as the need for translation when going abroad. This attempt showed Youdao the opportunity to lay out hardware products based on technology in certain specific scenarios, and the sales of 6000 units a month also gave Youdao corresponding confidence.
After Youdao translated the egg, Youdao saw the opportunity of dictionary pen products again. The first generation of Youdao dictionary pen sold 3000 pieces only one month after its release, and the sales volume rose steadily thereafter. In the process of deepening the category and iterating the products, Youdao successfully brought the dictionary and pen products. According to the data of JD e-commerce platform, in 2020, the sales of dictionary and pen products increased nearly 19 times year on year, and Youdao dictionary and pen ranked first in the list of electronic dictionary brand sales.
Youdao CEO Zhou Feng believes that a good learning hardware product needs hardware, content and algorithm at the same time. From the point of view of Youdao’s actions all the time, it has its own persistence and thinking in these three aspects when arranging hardware products.
In terms of hardware, Youdao has always insisted that it should have its own moat to make hardware, and should be able to exert its own advantages and establish competitive barriers. Wu Yinghui, senior vice president of Youdao, believes that when Youdao wants to participate in a certain product field, it actually wants to divide a region of its own advantages. In this area, Youdao can continuously do product iterations to make it better and better.
This is also the reason why Youdao has not laid out the phone watch products. After exploring, Youdao found that it was very difficult to make a telephone watch that was significantly different from the market products, so he gave up this category.
In terms of content, based on the content precipitation of online courses in the past, Youdao can better provide high-quality content for hardware and realize the integration of software and hardware. In terms of algorithm, Youdao has also established its own competitive barrier. Take Youdao Dictionary Pen 3 as an example, the product is equipped with a self-developed super-sensitive optical system, which is compatible with automatic judgment and recognition of two AI technologies, OCR (optical character recognition) and OID (optical identification code), with an average recognition accuracy of 98.3%.
Today, Youdao’s hardware business has become the “second curve” of Youdao’s development. According to the financial report, Netease Youdao’s net income from the learning products business composed of intelligent hardware in Q1 2021 was 202 million yuan, up 279.8% year on year. The gross profit margin of Youdao learning products increased to 44.1% from 25.6% in the same period in 2020. This increase is mainly due to the huge increase in the sales of Youdao dictionary pen 3, and the gross profit margin of this product is higher than that of other learning products.
No matter the sales data or the significance of the company’s growth, the reasonable hardware thinking has been verified. As a pioneer in the industry, Youdao’s logic of “focusing on its own advantages and making products down-to-earth” will not only open the growth ceiling for it, but also help it to stabilize its advantages in the future competition.
Competitive upgrading, how to win
According to the 2021 China Education Intelligent Hardware Trend Insight Report, it is estimated that the market size of education intelligent hardware will be 34.3 billion yuan in 2020, and it is expected to expand to 45.3 billion yuan in 2021, and close to 100 billion yuan in 2024.
The great development of the industry means that there are more participants in it. On the one hand, traditional hardware companies are still important players in the field of educational hardware. The sales volume of Bubugao Learning Tablets is considerable. Youxue Tianxia and Shulang have rushed to IPO one after another; On the other hand, online education enterprises represented by Ape Tutoring and Homework Help and giants such as Tencent and ByteDance have all entered the market.
It is self-evident that the degree of competition in the educational hardware circuit is fierce. However, due to the precipitation of past practice and the core logic of hardware, Youdao, as a pioneer, has built barriers in the competition.
In terms of focusing on the scenario-based requirements of hardware products, Youdao is not only a pioneer, but also provides more comprehensive and in-depth services. The Youdao dictionary pen covers the point reading scene in depth, and the functions of quick word search and word reading are also continuously optimized in the iteration. The key is that the education hardware products are not only limited to solving a single problem and demand, but also focus on the whole education cycle and provide complete solutions.
Take Youdao Dictionary Pen 3 as an example. Students can follow and answer questions interactively by clicking on the words in the picture book, and the corresponding scene animation can appear by clicking on the picture, with tests. Behind a series of experiences that encourage children to participate in, consolidate and improve the interactivity and efficiency of learning, it is inseparable from Youdao’s precipitation and analysis of user behavior data, and its long-term investment in improving product capabilities based on technology.
Interestingly, the rational product logic is becoming the mainstream development direction of the intelligent education hardware industry. At present, many products on the market, such as smart pens and smart homework lights, focus on the scenario-based needs of families or schools, and also rely on artificial intelligence and related technologies to achieve the functions of word search and homework correction.
When we first made dictionaries and pens, the market took a wait-and-see attitude. When they sold well, many manufacturers and dealers came in, Wu Yinghui said.
The change of market attitude reflects the recognition of the industry for reasonable hardware ideas. Youdao is equivalent to a “wind guide”, bringing a “value depression” to the center of the industry stage. At the same time, a new “wind induction” action is also in progress. According to Wu Yinghui, Youdao has been studying the category of learning tablets and is also very concerned about the changes in the market, including how the content of tablets changes students’ learning process, how to help students improve their learning performance, etc.
Obviously, in the new stage of the industry’s vigorous development, Youdao, which is committed to making products and changing learning experience and efficiency, has embarked on a new path.