Joining the smart hardware battlefield, what attracts PPTV mobile phones
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More and more Internet companies are joining the hardware war. The latest entrant is video company PPTV. On September 7, PPTV released its glasses-free 3D mobile phone and announced that it would sell 500,000 units by the end of the year. Just over a month ago, it entered the increasingly competitive Internet TV circle.PPTV's entry into the hardware market is backed by its major shareholder Suning Commerce Group (002024). However, the lack of a successful business model and the increasing number of new entrants have made PPTV's hardware journey even more confusing, as it was not an early entrant. Sell 500,000 units by the end of the year The naked-eye 3D technology developed for video viewing has undoubtedly become the selling point of PPTV mobile phones. But this technology also adds a lot of cost to PPTV phones. Dang Yi, head of PPTV's mobile phone division, told the China Times reporter that the yield rate of the naked-eye 3D mobile phone was only 10% at the beginning, and by the time it was released to the public, the yield rate of this phone was only 60%. He also told reporters that the naked-eye 3D technology also makes the cost of PPTV mobile phones 50% higher than similar mobile phones. According to the reporter, the price of the PPTV phone with this function is 2,699 yuan. In addition, Dang Yi also revealed that the 2K screen used by PPTV has increased the module cost by 32% compared with the FHD (full high definition) screen. Despite the low yield and high costs, PPTV still expects to sell 500,000 phones in the remaining four months of this year. In fact, this is not the first time PPTV has entered the hardware field. On July 29 this year, PPTV announced its entry into the field of Internet TV hardware, releasing three TV models at once and expecting annual sales to reach 1 million units. PPTV does not make money from hardware. The 43-inch TV it released is priced at 1,799 yuan, 200 yuan cheaper than the 40-inch Xiaomi TV. Fan Zhijun, chairman of the management committee, also said that PPTV will make money from services, such as software upgrades. Behind PPTV's involvement in hardware is the support from its major shareholder Suning Commerce Group. In 2013, Suning acquired approximately 44% of PPTV for US$250 million. At the end of 2014, Suning announced that it indirectly held 64% of PPTV's shares through its wholly-owned subsidiary. Suning, which hopes to build four major entrances including stores, PCs, mobile phones and TVs, has previously announced the launch of a number of strategic plans with PPTV around the "pan-entertainment" industry. This includes not only investing heavily in content and spinning off sports companies, but also entering hardware areas such as smart TVs and mobile phones. According to the reporter, Suning planned to invest more than 1 billion yuan in the PPTV project at the beginning of this year. Hardware War Dilemma Despite Suning’s support, PPTV did not start making hardware early. In January this year, Fan Zhijun mentioned at PPTV's strategic launch conference that PPTV aims to expand its device-side ecosystem, including the layout of various smart terminal entrances such as smart TVs, smart wearable devices, and mobile phones. He announced that PPTV's sales target for hardware is 4 million units. But before PPTV entered the hardware field, LeTV, which also had a large amount of video content, had already laid out its business on smart TVs and mobile phones, and achieved shipments of 1.5 million smart TVs in 2014. More and more Internet companies have entered the smart hardware market almost at the same time as PPTV. During this period, Smartisan Technology, which was also invested by Suning, launched the Nut phone, 360 cooperated with Coolpad to launch the Qihoo phone. Fengxing Network, in which Zhaochi acquired 63% of its shares, also announced that it would launch its own Internet TV on September 23. Compared with other Internet competitors, PPTV has its own advantages. In terms of content, PPTV has invested heavily in sports events. In August this year, PPTV announced that it had obtained the exclusive all-media copyright for the La Liga in China from 2015 to 2020. This means that all income from the copyright distribution rights of La Liga broadcast on television, the Internet, new media and public broadcasting will belong to PPTV. It is reported that PPTV paid a huge sum of 250 million euros (about 1.687 billion yuan) for this agreement. More importantly, PPTV has Suning’s strong channel and supply chain support. According to the reporter, PPTV mobile phone will be sold through Suning.com and more than 1,600 offline stores of Suning.com. At the same time, PPTV mobile phone will also cooperate with offline stores of China Unicom. In addition, Suning has also accumulated considerable experience in the upstream supply chain of smart hardware. In addition to launching TVs and mobile phones under the Pioneer brand, Suning has also been deeply involved in the launch of hardware such as Meitu mobile phones. It cannot be ignored that Internet companies that have announced that they will not make money from hardware have not yet been able to make profits through their own services. LeTV's financial report shows that LeTV Zhixin, which mainly sells smart TVs, had an operating income of 4.107 billion yuan in 2014, but an operating loss of 503 million yuan. In addition, according to reporters, Xiaomi TV is also in a loss-making state. But this does not affect the speed at which Internet companies attract money in the capital market. On May 13 this year, LeTV Sports announced that it had officially completed its first round of financing of 800 million yuan. Investors include Jack Ma's Yunfeng Fund. Guo Jian, an analyst at CCID Consulting Semiconductor Industry Research Center, told reporters that Internet companies make hardware in order to quickly occupy the entrance and sell services, and do not make money from hardware. "The money lost on hardware can be quickly earned back through the capital market." Dong Min, general manager of the black-and-white electronics business unit of AVIC Cloud Network, also told reporters that through the combination of hardware and content, companies can increase revenue and increase valuations as quickly as possible, thereby obtaining more capital returns. For PPTV, which has already suffered a loss of 485 million yuan in 2014 before it has even entered the hardware market on a large scale, will entering the hardware market bring it more investment or will it continue to put pressure on its performance? 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. |
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