With the implementation of the “double reduction” policy, many online education companies whose performance is under pressure have turned their attention to educational intelligent hardware. At one time, the popularity of educational hardware swept the entire online education industry. With the rise of the educational hardware boom, the competition in the educational intelligent hardware industry has become increasingly fierce.
On the one hand, the old educational hardware companies, under pressure, began to accelerate the pace of IPO (such as the listing of Shulang in Hong Kong); On the other hand, the competition among new players around hardware tends to be white-hot, and players from all walks of life are constantly upgrading around hardware. It is not difficult to foresee the various realities reflected from the entire intelligent hardware industry, and the era of great competition for educational hardware is coming.
The era of big competition of intelligent education hardware
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Hardware hot air head is positive
Among the new generation of intelligent hardware, the first popular intelligent education hardware is NetEase’s intelligent dictionary pen and iFLYTEK’s intelligent learning machine. With the success of Netease Youdao and iFLYTEK’s educational hardware products, two listed companies, Netease Youdao and iFLYTEK, have also achieved rapid development beyond their core businesses.
According to the 2020 financial report released by iFLYTEK, iFLYTEK’s hardware products contributed 49% of its gross profit in 2020, and helped iFLYTEK’s revenue in intelligent education sector, up 70.68% year on year; In addition to iFLYTEK, Netease Youdao has also tasted the benefits of intelligent education hardware. According to the data, Netease Youdao’s learning products (hardware products) increased by 255.1% year-on-year in 2020, and the gross profit rate reached 39.5%. The combination of high growth rate and high gross profit has enabled iFLYTEK and NetEase to maintain good profitability and cash flow level while developing rapidly.
With the successful experience of Netease Youdao and iFLYTEK in the first place, online education companies that have no way to go under the pressure of “double reduction” have started to launch hardware projects in succession. From the current industry situation, there are other considerations behind online education companies’ online smart hardware.
First, it is the continuous benefits brought by various policies. According to the public data, the Ministry of Industry and Information Technology and the Ministry of Education have released the Action Plan for the Innovation and Development of Intelligent Hardware Industry and the Action Plan for Education Informatization 2.0. The introduction of these two documents has further pointed out the direction for the development of intelligent education hardware industry. In February this year, the Ministry of Education issued the Notice on Strengthening the Management of Mobile Phones for Primary and Secondary School Students, which further clarified the management of mobile phones and other hardware. After mobile phones were controlled, the demand for electronic dictionaries as learning aids increased significantly.
Secondly, it is the imagination that intelligent hardware itself brings to the education industry. As an important branch of smart devices, the integration of smart education hardware and software technology makes it have the same “software and hardware integration” function as smart phones. Hardware manufacturers reach users through hardware, and then build ecological closed-loop through content services, which undoubtedly increases the attractiveness of the smart hardware industry itself.
Both the policy encouragement and the industry imagination brought by the hardware itself are pushing the intelligent education hardware into a new stage of development.
New opportunities under the tide of new technology
From the perspective of the real technology environment faced by the hardware industry, with the birth of new technologies such as artificial intelligence, voice recognition, cloud computing and 5G, the real conditions for hardware equipment to realize the integration of software and hardware have gradually matured.
First of all, the large-scale deployment of 5G business has rapidly improved the experience of hardware equipment in data transmission and human-computer interaction. According to the data of the Ministry of Industry and Information Technology, by the end of 2020, China has opened 718000 5G base stations, and the three major operators have 322 million 5G package users. With the further implementation of 5G in the C-end commercial scenario, it has greatly promoted the improvement of computing power of various intelligent products. Whether it is data transmission or human-computer interaction, the use experience and user scenarios of this generation of hardware products are much richer than before.
In addition, the application of technologies including voice recognition has enriched the intelligent experience of educational hardware and promoted the transformation of educational hardware from electronic to intelligent.
Secondly, with the continuous enrichment of hardware product categories and the continuous improvement of experience, the scale of intelligent hardware market has been greatly improved. With the continuous expansion of intelligent education hardware scenarios, intelligent hardware for various scenarios has begun to emerge in an endless stream. At present, the more typical applications are mainly in the following four categories: intelligent pen for education, intelligent work light, electronic paper for education and intelligent speaker with screen.
Among them, educational smart pens mainly serve the language learning of primary and secondary school students, and their representatives are reading pens, translation pens, dictionary pens, etc; Intelligent homework lights are mainly used as companionship tools for learning. In addition to providing lighting for students, they also provide homework guidance and help students with homework management, etc., while educational electronic paper and intelligent speakers with screens are used for detailed needs such as writing, reading and communication. According to the latest hardware industry report jointly released by iResearch and Tencent Research Institute, it is expected that the scale of the smart hardware market will reach 100 billion yuan in the next three years.
With the popularity of intelligent education hardware, publishers in the upstream and manufacturers holding other content resources, downstream technology manufacturers and hardware manufacturers have begun to cooperate more and more. This cross-domain cooperation has made hardware obtain all-round improvement in content, technology experience, hardware quality and other aspects. All of these have accelerated the development of intelligent education hardware.
The big competition era of intelligent hardware is coming
At present, the players of intelligent hardware can be divided into three categories: the first category is the enterprises represented by traditional educational hardware, and the hardware manufacturers that cut into the educational hardware scene, the former such as Shulang and Bubugao, the latter such as HP, etc; The second category is the Internet giants involved in the education track, such as Tencent and ByteDance; The third category is online education and education hardware “both hard and soft” companies. The representative enterprises are Netease Youdao, homework help, ape guidance, etc.
The first type of player, whose underlying logic is “selling hardware”, takes the function-driven as the main starting point to perform function iteration and performance optimization on educational hardware. Such companies have a relatively complete supply chain system, quality control is more advantageous, and sales system is more mature, but the disadvantages are also obvious. They can only obtain income through hardware, lack supporting content, and low threshold and low added value. For them, the core of their development lies in cooperation with upstream content producers. For example, the cooperation between Yongyida, which produces educational robots, and Himalayas, Dragonfly FM, and the cooperation between Hewlett-Packard and Tencent Education all belong to this category.
The second category is Internet giants, which aim at products with high public demand, such as intelligent desk lamps and speakers, which are suitable for home education scenes. For example, the powerful smart light with ByteDance; Tencent Education also officially announced the new product “AILA Intelligent Work Light”; Baidu and Alibaba launched smart speakers in 2020.
This type of player is strong in traffic, technology and strong resource integration ability, but they firmly believe in the Internet principle of “fast but not broken”, which determines that they are difficult to further advance in hardware, and most of them are superficial. For example, when ByteDance is doing business, if one direction fails, it will be removed soon.
The third type of online education software and hardware integration companies provide customers with software and hardware integration product experience through the way of “software+hardware+services”, and Netease Youdao is the most representative. The specific embodiment is to reach users through front-end hardware, then attract users to buy through built-in courses, and finally strengthen the whole online education closed-loop through services to achieve the best user experience.
From the perspective of the whole industry, the benefits of this closed-loop ecological model are obvious. On the one hand, for online education companies, the realization channels (hardware, paid courses, back-end services) distributed in all links have been opened, which is undoubtedly beneficial to the overall healthy development of the enterprise; On the other hand, every link of hardware, content and service can become a new entry point for reaching users, which undoubtedly greatly increases the customer acquisition ability of online education companies and effectively reduces their customer acquisition costs.
Of course, in order to achieve such an ecological closed-loop, we need to achieve the optimization of hardware, software, and services, and few enterprises can achieve such conditions. Therefore, in the long run, with the increasing participation of players, only a few enterprises with the comprehensive ability of “software+hardware+service” may be expected to win in the era of intelligent hardware competition.