Is Baofeng VR just a stock speculation tool?

In just a few months since its listing, Baofeng Video has seen its stock price continue to rise thanks to its virtual reality product Baofeng Magic Mirror. In early February, Baofeng Technology separated Baofeng Magic Mirror into a separate subsidiary. Recently, Baofeng Magic Mirror announced the completion of its first round of financing with a financing amount of US$10 million from investors including Huayi Brothers.

For Baofeng Technology, which does not have the upper hand in the video industry competition, a series of actions in recent times inevitably raise questions from the outside world: Can virtual helmets, a concept product that is still in its infancy, become a strong starting point for Baofeng's transformation? Or does Baofeng want to take advantage of people's optimism about the smart hardware market to obtain certain financing and ease the pressure of large investments in video content?

Video industry is burning money

In recent years, competition in the video industry has been extremely fierce. Major video websites have continued to spend money to buy copyrights, increase investment in content to produce self-produced dramas, and seize market share, making the development threshold of the video industry higher and higher, and the demand for funds is increasing. Nowadays, the only companies that have maintained their foothold in the video industry are Youku, iQiyi, Tencent Video, Sohu Video and other companies with strong financial resources or backing from big companies.

Some time ago, Xunlei sold its video website Xunlei Kankan due to business transformation. It can be seen that video companies have now become a game played by the rich. Whoever can burn more money can persist to the end. If Baofeng Technology wants to develop, it must find a way to obtain more financing so that it can keep up with the pace in the future.

In 2013, Baofeng Video's annual net income dropped significantly. After that, Baofeng Technology still chose to go public on the domestic A-share market, which inevitably made the outside world a little worried about how the weak Baofeng Video would rely on to compete with well-funded competitors such as Youku and iQiyi. In order to go public as soon as possible and find a way to raise funds, at the end of 2014, Baofeng launched the smart hardware product Baofeng Magic Mirror and chose to seek another development path and switch to virtual reality.

Virtual reality is more hype than reality

Judging from the current development of the virtual reality field, most VR companies are still in the early stages and there is a certain gap in technology with foreign countries. The opportunities left for companies in the future may mainly be in the mid- and low-end market below 200 yuan, and this market is highly dependent on channels and marketing.

It is understood that the current sales volume of Baofeng Magic Mirror is about 150,000 units. Once Xiaomi and LeTV, which are stronger players in channels and marketing, enter the market, the entire market structure will change dramatically. Baofeng, which started out as a video company, has almost no advantages in channels and marketing. Therefore, Baofeng's entry into the field of smart hardware virtual reality is just telling a beautiful story about the future to win the favor of the capital market and increase its stock price. He said that from the actual situation, the development of virtual reality is full of difficulties.

Judging from the current development of virtual helmets in China, it is basically unlikely for Baofeng to seek technological breakthroughs in a short period of time in the future. Oculus, which was acquired by Facebook for US$2 billion, is in the lead in research and development technology in the field of virtual reality, but its developed products are not mature enough. Judging from many feedbacks, its products still have a series of imperfect problems such as obvious pixels, low resolution, dizziness, motion tracking, etc. There is still a long way to go before it can meet the requirements of true virtual reality.

Therefore, in the future, Baofeng Magic Mirror can only gain more market share through content, indicating that efforts to build a service platform on virtual helmets may be Baofeng's main development direction in the future.

Baofeng Magic Mirror cooperates with Baofeng's UGC model. Users can mount a GoPro-like sports camera on their helmets to shoot, and then upload the video to their Baofeng account for interactive sharing and for other Baofeng users to enjoy. This will be Baofeng's main strategy for future development. However, due to equipment limitations and a narrow market, it does not contribute much to the future development of video websites.

Recently, LeTV, which has an advantage in video content copyright, announced that it will also release a virtual helmet. It can be inferred that under the premise of showing its advantage in video content, in the future terminal development, the smart hardware field that is favored by the capital market will attract more and more companies to stop. However, judging from the current development, more cross-border development has not made the virtual reality technology develop better and better. Instead, excessive hype will harm the user experience.

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.