Smart TVs: How to Build an Industry “Moat”?

As the most important scenario economy for household consumption in the next ten years, smart home has not found a suitable way to open smart air conditioners, smart kitchens, smart locks, etc., or use less high-frequency, or a weak sense of existence, unable to open the system complex Family IoT industry chain.

Only TV is the most concerned intelligent terminal in the home except for mobile phones, and it is the ideal traffic entrance for Internet+home. With smart TVs entering more homes, the gradual development of user payment habits, video on demand, games, education, shopping, etc. have become the most popular applications for users, and the living room economy is beginning to take shape. As an important part of the home screen, the intelligent wave is in full swing. Smart machines also have the key link of the “Home Internet of Things”.

The rise of the smart TV market has caused traditional home appliance manufacturers to transform, Skyworth incubating new Internet brands to cool off TV, and Haier, Changhong and TCL have all launched larger screens and smarter Internet TVs. Under the new niche market, many Internet companies such as Xiaomi, Leshi, and Storm have also become “barbarians at the gate” and want to compete with the “Aboriginal TV brands”. Sharpness from 4K to 8k, screens from flat to curved, black technology such as VR and AI are constantly empowering smart TVs. Behind the differentiated brand strategy and product positioning are different development paths. Which path of innovation can build the industry “moat”?

Perfecting the Industrial Chain: "Moore's Law" to Prevent "Intermittent Malfunction"

A strange thing happened in the field of home appliances in recent months. The most value-free smart hardware actually increased its price. According to the report of China National Grid at the end of 16 years: “In recent days, the reporter visited and found that although the atmosphere of home appliance sales at the end of the year has become increasingly strong, the entire home appliance market has quietly ushered in a new wave of price increases, especially for color TVs. Obviously, in the past, the 32-inch LCD TVs in the market that are worth about 1,000 yuan have been hard to find. The overall size of small- and medium-size LCD TVs has risen between 10% and 20%. TVs of other sizes have also risen to varying degrees.

Starting at 0:00 on February 8th, new prices were implemented at channels such as Xiaomi Mall, Tmall, Jingdong Flagship Store, and Xiaomizhijia.

Internet TV brands used to use the “free mode”, knowing that “wool is on dogs, allowing bears to pay” and can use third-party advertising such as implanted advertising, to eliminate some of the cost model, or to launch value-added services. In general, even lower, even lower than the cost of sales, such as LeTV, Xiaomi's negative profit marketing, but even so, millet, music as the wave of price increases are also changing prices in a row, the so-called Internet model is also critical Did not work.

We all know that technology products generally follow Moore's Law, that is, when the price does not change, the number of components that can be accommodated on integrated circuits will double every 18-24 months, and the performance will also increase. Times. In other words, the performance of the computer that every dollar can buy will more than double every 18-24 months.

[Integrated Circuit] As a technology product, it is universal, almost all technology products have this feature, and the price of smart TV is rising at the end of such a promotional season at the end of the year, since the second half of 2016 The prices of major materials continued to rise. As of November, copper, the main raw material, rose by 40%, continuing at 49,000/ton, steel prices rose by more than 200%, and prices for plastics and aluminum rose by more than 30%. Coupled with the continuous increase in labor costs, logistics costs have risen by more than 30% due to factors such as over-limit loading.

Industry analysis, raw materials, labor costs, logistics costs, "three arrows", the price of household electrical appliances is also objectively unavoidable, companies can not digest their increasing costs, can only reduce costs through the way to reduce costs pressure.

Although Moore's Law has universal applicability to the price trend of technology products, the business environment is dynamic. This time, the price of smart TVs has been raised, and Moore’s Law has also seen “intermittent failures.” Even though consumption upgrading has now become the main theme of the times, However, it is undeniable that prices are still a core reference factor for users to choose to purchase products. When E-commerce Festival, discounts will always be the most effective marketing tool.

In addition, the price increase of the product is mainly due to rising costs, pressure, originally profit is thin, not price adjustment, we all know that the higher the price of the product, the higher the profit, this part of the profit can eliminate the rising costs, The products that can not eliminate the pressure of cost are mostly “silk silk edition”. This group of people is extremely sensitive to prices. Imagine that when a competing product is in price adjustment, if a certain manufacturer can maintain the original price, even a certain number of products will remain at the original price. , coupled with appropriate public relations strategies, the brand is likely to occupy the user's psychological awareness, the brand gets the occasion of the birth of the mobile Internet [millet-like word of mouth].

In order to defeat the enemy, we must undoubtedly increase our bargaining power over costs and have a complete supply chain management capability. The supply chain first came from the "economic chain" proposed by Peter Drucker, and later developed into a "value chain" through Michael Porter, and eventually evolved into a "supply chain." It involved the control of information flow, logistics, and capital flow. From purchasing raw materials, making intermediate products and final products, finally the products are sent to consumers by the sales network, and suppliers, manufacturers, distributors, retailers, and even end users are linked into a functional network model. Perfect supply chain management can undoubtedly eliminate "Moore's Law" of "intermittent failure."

For example, in this piece of “Upsound”, as early as September 2016, before the price increase of home appliances, Suning made an accurate prediction of the large-scale upward adjustment of color TV prices in the second half of the year, and conducted in-depth communication with the first-tier brands. , In advance for the second half of the promotion signed a million models of explosion models and large single underwriting products, covering all sizes from 32 inches to 75 inches.

The importance of supply chain management capabilities is evident. The same is true for smart TV manufacturers. It is necessary to be able to predict the direction of the industry in advance and rationally plan to become the winner in this wave of price increase.

We all know that Apple Computer has been drawing most of the benefits of the smart phone market. Apart from its stunning appearance and smooth OS, it is like an aircraft carrier floating on the water. The strength of Apple is far more than that. For example, accumulation in the supply chain, quality control and channel management, and experience and lessons learned from the economic cycle and brutal competition are all under water. In particular, Cook, after the death of Qiao Bangzhu Xian, Cook served as CEO, Cooke supply chain management capabilities in the industry reputation, Apple was rated as the world's best supply chain management company, even on the FMCG consumer products.

AI or VR/AR: Hardware Takes Over, Software Takes the Lead

In recent years, the most popular black technology is undoubtedly AI and VR. The reason why such black technology can reach the level of the whole people is not unrelated to its universality. VR can be used for shopping, home improvement, social networking, games, etc. What is more, it is like a omnipotent magic that can be grafted with all smart hardware products. In the face of these two national-level applications, how should smart TV manufacturers invent it?

In Zhi Gang's view, for smart TV manufacturers, VR/AR does not have to panic, and AI technology can be boldly tried.

First of all, let's analyze why VR/AR does not have to panic.

From the current point of view, TV makers involved in VR/AR basically go two ways. One is to advertise their own TV is VR or AR TV, and the other is to set VR area in their own system with the minimum cost. To satisfy the user's curiosity. However, in the face of cruel reality, these two roads have not gone through.

Let me talk about the first road. In May of this year, Stormwind TV pioneered the release of a product called VRTV in China. However, after the actual experience, you will find that the so-called VR TV is still actually implemented in the incidental storm mirror, and the TV itself is completely in a "split" state. The so-called second road seems to be a “low cost, quick response” approach, but it actually provides only a few peripheral applications that are not very high quality in real estate, tourism, education, etc. How helpful is the actual experience.

Compared to AI, VR is a hardware product. At present, it seems that VR technology is not yet mature, users will face long-term viewing problems such as vertigo, head discomfort, this is a naked flaw, hardware products are not like software Can adopt MVP (according to the conventional development methods, from research, to design, to development and then to the market, it will be a long process, and it is difficult for someone to guarantee the success rate. But when you change the way to MVP Conduct small sample research, quickly enter the market, contact customers and get feedback. Constantly modify the prototype through feedback, and continue iterative development, greatly reducing the cost of trial and error.), The software can exit the demo version first, then the system will automatically Upgrade, hardware can not, now VR technology is not yet fully mature, facing a lot of flaws,

Compared to VR, although AI is not yet fully mature, it is in the initial stage of the outbreak, but AI belongs to the software system. Even if the previous period is not perfect, the version can be upgraded later. In addition, the AI-packaged smart TV, in the product forcing, there is Pricing power can take a very high weight.

Not only that, but the biggest improvement of smart TVs over traditional TVs is not the outward-oriented networking, but intelligence and artificial intelligence as the higher dimensions of people with intelligent hardware, which play a crucial role in the technology of smart TVs. From smart TVs to "artificial intelligence" televisions, the great difference is reflected in the "human-computer interaction." In addition to intelligent speech recognition, artificial intelligence TVs also require artificial (deep) learning, machine (autonomous) learning, and robotics. , big data, application software iteration, and other complex technologies as a support, the research team needs a lot of hard, mental and financial resources for many years. It is definitely not a company that is good at short-term quick play.

Artificial intelligence products must cross three levels of “cognition”, “decision making” and “feedback”. With the birth of artificial intelligence television, it not only retains the advantages of a smart TV with a large screen, a clearer picture quality, and rich content, but also combines the advantages of human-computer interaction and personalized recommendation of artificial intelligence, and enhances the viscous use of TVs and users. Experience, become the ideal traffic entrance of Internet + family.

Be wary of blind screen: system and content two-wheel drive

With the upgrade of the production structure of LCD panels and the drop in price, 55-inch, 65-inch, and even larger-sized products have gradually become mainstream. At the beginning of the year, the giants Samsung, Sony, Internet manufacturers Leshi, and Xiaomi all released 65-inch, 70-inch, and 75-inch products. Later, Changhong, Hisense, Skyworth and other established manufacturers also rushed in and released a number of large-size models, even With the background of the licensee, the new Internet TV brands are still releasing an 85-inch product. It can be seen that large-size models have become a clear trend in the domestic color TV market this year.

Large-screen TVs can bring more visual shock and sensation to users, and large-screen TVs will appear more “atmosphere” when they are placed at home. However, smart TVs cannot blindly pursue large screens, but also consider specific user usage scenarios. With last year's rising housing prices, for most of the newly-emerged groups, the houses purchased are mostly small-sized units, such as 90-level small three-bedroom units. 60 flat rooms and so on, this group is mostly 80,90, is the core backbone of the Internet, should be the mainstream of smart TV crowd, the house is small, the living room is necessarily small, smart TV not only carries entertainment properties, or family Decoration, the size of smart TV is to complement each other, and with the type of units, so the main user groups for the small family, smart machine screen can not be too large, so you can be appropriate, smart machine manufacturers do not need to blindly pursue the big screen.

For the core population of the post-80s and the 90s, the operating system of content and television is the two most important factors. Especially in the current homogenization of hardware is becoming more serious, whoever has more exclusive content will have more differentiated competitive advantages.

We may wish to think about a problem, why do users need to replace the traditional TV that can still be used? There is no doubt that traditional television cannot meet the needs of users. In essence, users have initially formed a richer content payment habit. The focus of smart TVs is not "television" but internet, content. For Internet TV, the key to the explosive growth of paid video users is the construction of brand content ecology.

In addition, the richness of content can enhance user stickiness and increase boot frequency. Another major difference between smart TVs and traditional TVs is that traditional TVs are unidirectional and non-interactive, while smart TVs are connected to networks and users can be collected. Data has become a large database for the household Internet of Things and is also a new profitable point for smart TV manufacturers.

In the final analysis, content services are the maximum use of information value. Like mobile terminals, when different people use televisions to achieve their own different needs and spend more time on them, the greater the value of their information to users, the more room there is for information to add value. The final destination of the smart TV business service, the final is the user directly realized the resale to the advertisers can be realized. One of the best services is to make all people get benefits, users get service value, terminals get advertising fees, businesses get users.

As the soul of hardware, the operating system has always been a fortress to be overcome by major manufacturers. We take the smart machine as an example. Although there are many articles on the market that plagued Apple's failure, it is undeniable that domestic and foreign mobile phones still cannot extricate themselves from the system limits for overall optimization and innovation. There is always a gap between the experience of the domestic mobile phone and the Apple iOS system experience in the software experience environment.

In terms of hardware, Apple's battery is not durable, easy to automatically shut down, the same price point of view, Apple's hardware configuration is by no means the highest, but the IOS system is perfect, many Apple's loyal fans, Apple products have been used for many years, a large part of the reason It is Apple's operating system.

For smart TVs, the system also occupies a very important position. At present, the Android operating system is the mainstream choice for smart TVs. TV manufacturers including TCL, Konka, Skyworth, and Sony have all launched Android smart TVs. The operating system commonly used in smart TVs is also the Windows system. Because of its large user base and strong compatibility, it is currently the most mainstream operating system in the world. It is also widely used by color TV manufacturers in new smart 3D TVs, and smart TVs such as Changhong. The main use of the Android system, foreign brands use the Windows operating system; TCL also uses the Android + and Windows dual system.

There are more than Android and Windows operating systems, Panasonic has a Firefox operating system, Samsung has a smart center with Tizen, and LG has WebOS. It can be said that smart TV operating systems are no different from smart phone operating systems. Today, the major operating systems are different. The advantages and disadvantages are not as obvious as those of mobile phone operating systems. Therefore, increasing the fluency of smart machine manufacturers to improve the operating system will increasingly become the core competitiveness in the future.