Tencent, Alibaba, and LeTV all use these four tricks to build cars

On July 6, 2016, the Roewe RX5, a joint effort of SAIC and Alibaba, was launched on the market . The first truly Internet car was officially introduced to the market, and the concept of "Internet car manufacturing" was once again pushed to the forefront of public opinion. From technology to business models, from strategy to R&D, even every detail of the press conference attracted the attention and comments of people from all walks of life.

However, for the automotive industry, the RX5 incident is more than just a feast of public opinion. It means that the "barbarians at the gate" that we have been both afraid of and despised for more than two years has already stepped into the industry's vestibule, and the situation in the industry has quietly changed.

The key essence of the cooperation between SAIC Roewe RX5 and Alibaba is that the car is equipped with Alibaba's YUNOS system. This is a system equivalent to Windows for computers and Android or Apple OS for smartphones. Without Windows system, today's computers are just a pile of scrap metal that cannot be operated by the general public. Without Android or OS, today's mobile phones are just bricks that can only make calls, and all the rich and colorful computer and mobile phone content cannot exist.

The same is true for cars. Although today, we can enjoy the so-called driving pleasure by driving cars that only have mobile phone mapping, simple central control screen functions, and complex external electronic devices. However, 50 years later in 2066, if someone drives such a "non-intelligent" car again, it will be as unbearable as using a mobile phone with only dialing function in 2016.

In the automotive field, "intelligence" is just around the corner. The foundation of intelligence is a highly compatible operating system.

A familiar history

Going back 20 years, before the emergence of smartphones, there was a brief period when the market was flooded with various domestically assembled mobile phones with "full functions" - they could make calls, send text messages, listen to music, read e-books, play videos, take photos, record... They were crudely made, and everything they could think of was integrated into them with additional hardware, just like the smart connected cars on the market today that are full of various pre-installed and post-installed functions.

But soon, with the popularity of Apple OS and Android phones, these short-lived integrated products quickly lost the market. Because the compatibility of the operating system is too strong, and the use of functional apps is too convenient. With the basic hardware and operating system complete, all functions have become apps that can be downloaded from the cloud platform, and the functions realized by apps under the operating system platform not only meet all the functions of the early integrated assembly machines, but also open up unlimited applications that people have never thought of. The content of smart applications no longer needs to be concentrated on the few that are attached to the main hardware by hardware and independent systems. The "Pandora's Box" of intelligence has been truly opened.

After that, Google open-sourced its Android operating system. In theory, anyone can make a mobile phone with their own brand name based on the Android software system and Foxconn's production system as long as they want. Then, the traditional mobile phone giant Nokia collapsed, and the BlackBerry mobile phone, which dominated the traditional market, also saw its market share drop below 10% in the next few years...

The same is true for the automotive industry. Various systems that are constantly integrated into the car through pre-installation and post-installation, even the so-called VR and AR technologies, are not the key to intelligence. Those cumbersome additional systems always have a limit to their carrying capacity. Once the core operating system matures, more functions will be realized through the operating system + application platform under the standard intelligent hardware. And all new functions, whether VR or AR, rely on these two.

In fact, the watershed of the industry has already appeared.

Now, on the one hand, operating systems similar to Android have been born, and the Alibaba YUNOS system installed on the SAIC Roewe RX5 is a typical representative, although it is still in its early stages; and at another key point, Foxconn, a major manufacturer, is cooperating with Tencent to enter the automotive industry "using the production capacity formed by the big data accumulated over many years of processing as a platform"...

It can be said that the conditions for the era of smart cars are already in place, with the emergence of intelligent operating systems and the production capacity of high-tech mass production also ready to take off in this field.

The time has come for the automotive industry to make a choice: to go bankrupt like Nokia, to become an OEM like Lenovo, or to find a new way like Xiaomi and Huawei.

Four “routines” of Internet cars

The concept of Internet car manufacturing is relatively broad. In short, any link in automobile research and development, production, and manufacturing that is driven by Internet thinking and participated in by people and companies with Internet backgrounds can be called Internet car manufacturing.

Due to the different thinking patterns of the participants, people's expectations for Internet car manufacturing are completely different from traditional car manufacturing - traditional car manufacturing focuses on functions, while Internet car manufacturing focuses on experience; traditional car manufacturing focuses on manufacturing, while Internet car manufacturing focuses on technology; traditional car manufacturing focuses on quality, while Internet car manufacturing turns quality into perceptible emotions; traditional car manufacturing focuses on the current market, while Internet car manufacturing leads the future. Therefore, simply adding a central control screen and car networking components to the car is not true Internet car manufacturing, which has its own characteristics.

1. We are not building a car, but an intelligent system

First of all, the key direction of Internet car manufacturing is not the car, but the intelligent era. Too many people think that Internet car manufacturing is just a concept and gimmick, because the automotive industry has a long industrial chain and complex manufacturing, which is not something that outsiders can participate in and change. But in fact, the direction of Internet car manufacturing has never been to assemble a traditional car. What they want to build is a system in the context of intelligence to empower the car.

Just as smartphones replaced traditional mobile phones, it was not because a certain manufacturer produced mobile phone hardware with disruptive technology. On the contrary, the disruptors simply provided mobile phones with a platform that could run massive amounts of APP content through intelligent operating systems. From then on, mobile phones entered the era of intelligence, and the entire mobile phone industry also underwent a radical change. (From this we can see that the disruption of non-smartphones by smartphones is not because new entrants understand the value chain of mobile phones and develop new mobile phones. They just provide a general mobile phone operating system, and this operating system is full of content, which has disrupted the mobile phone industry. People who always say that the complexity of cars is much higher than that of electronic products, so those who will not follow the old path of electronic products should understand that the disruption from non-intelligence to intelligence is a path that has nothing to do with the complexity of the hardware industry chain.)

The same is true for cars. To disrupt the automotive industry, you don’t need to build a completely different car, but only a platform software that can be used to carry intelligent content. Since the “ghost of industrial society” “software” came into our world, the disruption of hardware has never been just the “self-negation” of its own higher technology, but a contradictory unity of “mutual promotion and mutual subversion” between hardware and software.

Based on this principle, the car-making plans of BAT and LeTV have a large-scale intelligent pattern that goes far beyond the car itself. Alibaba cuts in from the operating system as the basis to build a basic platform for the intelligent era; Baidu cuts in from the perspective of big data and intelligent cognition to build fully autonomous vehicles; Tencent and Foxconn cut in from industrial big data to transform the original foundry companies into platforms with core manufacturing capabilities; and LeTV starts from the content field that it is best at, cultivating massive applications on the intelligent platform. It can be said that the four major groups have already seized all the large-scale intelligent entrances around future cars. Such entrances have nothing to do with building a car hardware, but are related to future intelligent production and life.

So, how powerful is intelligence? Let's think back to the example of mobile phones. Today, no one of us who use smart phones can tolerate using Nokia's non-smart phones anymore, even though in a mobile phone consumer survey 20 years ago, no consumer thought they needed a strange thing called an APP. But 20 years later, the value of the mobile phone itself has shrunk significantly, and the operating system and APP on it have become the soul of value acquisition. The same is true for future smart cars.

2. Don’t make money by selling cars

Secondly, Internet car manufacturing focuses on long-term strategies rather than being limited to selling a car at the moment. The essence of these strategies is the ecosystem laid out by each company.

In a broad sense, ecology can refer to the integration of any related resources, but in a narrow sense, ecology is an Internet term that embodies the essence of Internet thinking - the non-linear separation of profit points and business points.

In traditional industries, there is a linear relationship between business and profit. If you produce cars, you make money by selling them. There is a very traditional and vivid term for this linear relationship called "industry chain". However, Internet companies are completely different. Alibaba does not make money by selling clothes on Taobao, Tencent does not make money by charging WeChat users, and Baidu does not make money by charging users of search engines. Their business is to cultivate "traffic". After the traffic is formed, they make money by relying on the traffic through other multi-directional businesses. It is precisely this distinction in models that has led to the era division of the Internet.

In the 1.0 era, various companies scrambled to grab territory and occupy traffic, resulting in QQ and Tencent having hundreds of millions of users, Alibaba having hundreds of millions of online merchants, and Baidu having billions of search volumes.

In the 2.0 era, based on such traffic, Internet companies accessed and ignited various businesses - catering, laundry, taxi-hailing, car repair, community services, etc. and collected a large amount of data.

In the coming 3.0 era, the Internet has entered the era of big data analysis and providing better customer experience based on the traffic and data accumulated in the early stage. "Traffic" and "data" are like fertile soil, and various platforms and content that can improve efficiency are plants planted in the soil. These "plant-type" platforms continue to nurture various specific profitable businesses and industries, and these businesses and industries constitute the "animal-type" business with increasing levels. These businesses nurture layer by layer and continuously supply "traffic and data" to the "soil" layer, prospering platforms and content, forming an ecology that is very similar to the biological field, and manifested as an interlocking circle, which is called the "ecosphere".

Internet car manufacturing has obviously borrowed deeply from this thinking.

As mentioned earlier, Internet car manufacturing is rarely intended to make money by selling cars. Alibaba does not make profits by selling Roewe RX5. As the basic layer application of future intelligence, Alibaba hopes that this system will become the "Windows" of the automotive industry. On the one hand, the operating system has a significant habit dependence. The sooner the operating system is recognized by users, the more it will be relied on by customers, and the sooner it will form a huge monopoly advantage that smart cars must use the YUNOS operating system; on the other hand, Alibaba is essentially a big data company (Jack Ma said), and the YUNOS system with a monopoly advantage will become the most comprehensive and effective user data capturer in the automotive field. Based on such a big data soil and YUNOS platform, Alibaba can build a rich ecosystem and capture all industries around the car.

3. Two roads: intelligent software road and hardware road

Third, the Internet car-making path is divided into two, and companies that take the path of intelligent software and improving car experience each have their own strengths.

After the mobile phone entered the era of intelligence, traditional mobile phone manufacturers collapsed, and the emerging mobile phone business was divided into two different development paths. One path is represented by Google and Apple software systems, which develop operating systems and the intelligent application ecosystem based on them. They also support a large number of APP application development companies; the other is the mobile phone hardware path represented by Apple hardware, Huawei, and Xiaomi, which also provide business to a large number of component suppliers and OEM manufacturers including Qualcomm and Foxconn.

Apple is the most special one among them. It not only builds its own software ecosystem, but also creates mobile phone hardware that people are obsessed with through extreme craftsmanship. It is a leader in the mobile phone business and a benchmark in the industry. Of course, even Google and Apple, which develop software systems, have open and closed system models; even Apple, Huawei, Xiaomi, and LeTV, which develop hardware, have different paths around craftsmanship, technology, marketing, ecology, fans, etc. On the one hand, this is the difference in their respective strategies, and on the other hand, it also reflects that after the intelligent era, the subverted industry competition formats can also be colorful.

Similar to the mobile phone industry, after entering the intelligent era, automobiles will also move forward in two directions.

One path is the system plus content application path represented by Alibaba's YUNOS system and LeTV's content ecosystem. This is why Alibaba is so eager and invests a lot of energy in developing an operating system.

The other is the hardware path represented by NIO, Faraday Future and Furture Mobility. They enter the field of automotive hardware production through brands, extreme craftsmanship or industrial big data technology.

Similar to the mobile phone industry, even in the field of operating systems and application content, Alibaba and LeTV have their own ways of playing; and even in the field of hardware, LeTV, Faraday Future, and Future Mobility have very different methods. In the future, with the participation of Xiaomi, Gree, etc., this industry will present more development strategies.

But the overall pattern of these two roads has basically been determined.

In my opinion, the software path is not suitable for most OEMs without software foundation to go it alone. In order to gain first-mover advantage here, they need to cooperate with large Internet companies with software and data capabilities as soon as possible. The hardware path must also avoid Nokia-style conservatism and must transform as soon as possible, learning from the development strategies of Xiaomi, Huawei, Apple hardware system, and LeTV hardware system. This is the reality that traditional vehicle manufacturers must face.

4. Internet Marketing Strategy

Fourth, Internet car manufacturing will draw a lot of business strategies from Internet companies, including iterative research and development, ultimate products, fan economy, commodity fetishism, etc. However, these are not individual strategic innovations, but deeper strategic advances aimed at the transformation of the future automobile market.

When mobile phones were turned into all-powerful life function aggregators by operating systems and massive applications, the competition in the mobile phone industry changed completely. Since then, it is no longer possible for mobile phones to attract customers through functional and hardware innovations. High-performance CPUs, large screens, high-resolution cameras, thin product appearances, gyroscopes, and GPS positioning systems have become standard features of mobile phones. They may be divided into high-end and low-end, but these parts and performances will inevitably appear on any mobile phone. The competition between excellent mobile phone manufacturers began to shift in a new direction. All promotional videos and press conferences are full of emotional technology and perceptible quality. They all talk about feelings and dreams, and deliver humanistic care. From then on, products became services, services became experiences, and experiences became the values ​​of a group.

Xiaomi's marketing strategy, Huawei's product strategy, and LeEco's ecosystem, which are the leaders in the mobile phone market, are all beginning to apply Internet-style business methods in this context. To some extent, the Internet-style business concept and method, as an innovation, is a helpless move.

Now, due to this kind of helplessness, Internet companies have already experienced it once in the mobile phone industry, so when they entered the automotive industry, they already knew how the future of the "intelligent" industry would work out. So they immediately started these actions.

LeEco has been promoting Faraday Future’s brand in a high-profile manner and is ready to transplant its own content ecosystem to the car side; Tesla has attracted fans like a star, making the world crazy about the technological elites of the new era; Alibaba has held a fascinating press conference, and as a leader of the times, it has proposed to subvert mobile phones with smart cars...

These endless strategies are not only because they are Internet companies, but more importantly, they have seen through the fog and seen the path of future automotive intelligence development and laid out a longer-term strategy. It is precisely because of the deep understanding of the future prospects and the active layout of future strategies that those strategies will be continuously used. This is exactly what our traditional companies must understand. We cannot learn strategies for the sake of learning strategies. We must have an understanding of the future and set strategic goals to better understand how to use those strategies. Otherwise, if you forcibly learn other people's strategies, you may end up "drawing a tiger but drawing a dog".

The future is here

To sum up the above, we can see that Internet car manufacturing is neither mysterious nor complicated.

For example, Internet companies such as Alibaba, Tencent, Baidu, and LeTV are almost bound to act as system, software, application, and content providers. In order to survive in the future market, another group of people must choose the path of Apple, Huawei, and Xiaomi to produce extreme craftsmanship and use extreme marketing methods to gain their own fans. Companies doing this include Weilai Automobile and others.

Although these two paths are different, they are not completely separate. This is why the Internet company Tencent invested in Harmony Futeng and the content provider LeTV invested in Faraday Future.

The era of automobile intelligence is coming. With the full compatibility of the operating system entering the vehicle as a symbol, massive resources will be integrated into this system in the simplest way.

In this context, newly added electronic hardware devices have only two paths: (1) useless electronic devices are discarded; (2) essential electronic devices become standard equipment in cars.

In these simple and integrated hardware, APP applications and operating systems will bring a myriad of future automotive functions. With this, driverless technology will further develop based on this system. On the one hand, the basic operating system provides a simple basic platform for the driverless system; on the other hand, the improvement of driverless technology further frees people from the single action of driving, making the huge functions brought by the system and applications more and more useful. As a result, the operating system, driverless driving, smart hardware and APP application platform have been unified, and their orderly evolution together constitutes the ultimate goal of "smart car".

The future is here, it's time to make a change.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.