Smart routing: the battle for the unclear “entrance”

The smart router market has always been interpreted by the outside world as a "battle for entry". In just one year, the small router has gone from a dusty gadget at home to the first barrier of smart home. In addition to the active layout of major manufacturers such as 360 and Xiaomi, there are also startups such as Magic Bean and Ji Router. Uncle Hong has done nothing else in the past two weeks, interviewing the heads of various smart routers, hoping to understand the smart router market through their descriptions.

In order not to waste your time, Uncle Hong puts the conclusion of the article directly at the beginning. If you don't have time, you can just read the conclusion. If you are interested, you can read the detailed explanation at the end.

1. Stability and compatibility take precedence over everything, including “intelligence”.

2. Smart routers still do not have a clear monetization model and are still under exploration.

3. The router market has a bright future, but it is too early to talk about "grabbing the entrance" at this stage

Stability and compatibility are paramount

Five years ago, routers were still a novelty. With the popularization of the Internet, this small device that accesses the Internet through wireless signals has gradually entered thousands of households. TP-Link, a giant in the router market, sold 120 million router devices in 2010 alone. Today, router manufacturers represented by TP-Link, Mercury, and Tenda have become the synonyms of the "old era", and smart routers have begun to rise.

Like smartphones, smart routers are installed with a system that allows users to add functions to the router. Just like mobile phones support phone calls and text messages, but only smartphones can install applications. Smart routers are still ordinary routers in essence, and the added functions come second.

During the interview, Uncle Hong found that whether it was the CEO of Modou, the CEO of Jilu Router, or the person in charge of 360 Router, they all expressed the idea that "the stability and compatibility of smart routers override everything." The Weibo tag of Modou CEO Huang Dong reads "Open Source Heavy Supporter Maker Supporter." This expert has been working in technology for more than 20 years and has a very deep understanding of routers. Old Huang told me that in fact, the current smart router brands have put most of their energy on compatibility and stability. Regardless of whether it is smart or not, the prerequisite for users to use your product is that the signal is good enough and the device is stable enough for a long time before installing third-party applications.

At present, the most famous system in the smart router market is Openwrt, which is a system developed based on Linux and has strong scalability. Currently, Xiaomi and Jilu Router are using this system (Jilu Router also has non-Openwrt versions), while Modou and 360 use their own portable firmware. Lao Huang admitted that the biggest difficulty in flashing the system into the router is not the hardware, but making the system stable and compatible. The upstream of the router faces chip manufacturers such as Qualcomm MTK Broadcom, and the top layer is the intelligent system. Since the Linux system is open source and the versions are not unified, the two are prone to compatibility issues. At the same time, there will be differences in hardware. Different solutions will have different performances in temperature control and signals. This also leads to the fact that the router seems simple, but in fact it is also a process of groping and filling pits similar to mobile phones.

Consumers know very little about the above technical issues. For consumers, the basis for judgment is very simple: good signal, connection, and no packet loss during long-term use, this is a good product, otherwise it is garbage.

At present, all smart router manufacturers believe that stability and compatibility are the top priorities, and most resources are also tilted in this direction. As for the choice of software system, Magic Bean and 360 still insist on developing their own systems independently, and Jilu has also begun to invest in research and development to independently develop its own system. Openwrt is like the openness of Android in the past, but the compatibility issues it brings are still quite a headache. The different positioning of routers and mobile phones is destined to make manufacturers focus on the most basic work.

The smart routing market still has no clear monetization model

"To be honest, Jilu does not have a very clear monetization model now, and we are still exploring," Ding Yi, co-founder and vice president of Jilu, told Hongshu. "Jilu is now working hard on two commercial directions. One is to help video providers reduce peak load and fill valleys and reduce costs; the other is to focus on commercial routing."

Compared with traditional router manufacturers, smart routers are still in a money-burning mode. Investors believe that the router market is the future development direction. Therefore, investment manufacturers have made strategic positioning in advance. For example, Jilu Router has obtained investment from KPCB (Internet Queen Mary Meeker) in the United States. As for the business model, Jilu Router, which has the largest shipments and the earliest router in the smart router market, also humbly said that it is exploring. In the chat with Ding Yi, Uncle Hong roughly sorted out two directions:

B2C: Jilu Router is targeting China's huge video market and hopes to cooperate with video manufacturers to change the current business model. Currently, the largest expenditure of video manufacturers is on telecommunications CDN, especially in the evening prime time, where the price is higher. Jilu Router can choose to cache the content that users want to watch in the router when the traffic is low, so that users can watch local content at any time. This operation plays the role of "peak shaving and valley filling", avoiding the high cost of traffic during prime time, and also taking advantage of the high idle time in the middle of the night, which is in line with the trend of green energy.

This form of Jilu Router is very similar to the American smart furniture NEST, which realizes dynamic adjustment of electricity prices through intelligent regulation and returns the benefits to users. At present, Jilu Router's cooperation mode has been launched, and Youku and Sohu Video are expected to become the first batch of partners.

B2B: Jilu is currently exploring the commercial routing field, providing commercial-grade routing equipment for public WIFI solution providers. Commercial WIFI will be flashed with a dedicated commercial system and will provide convenient Internet access services. Currently, Jilu has started research and development.

Currently, Jio Router ranks first among all smart routers with a sales share of 64.3%, while Xiaomi Router and Magic Bean Router rank second and third.

The business model of Jilu Router is considered to be quite far along, but another startup, Magic Bean, has chosen another path. This month, Magic Bean began internal testing of the Magic Bean Button, a button connected to the router via the DASH 7 radio frequency protocol. This button can be customized according to the user to achieve different functions. At the same time, the effective distance reaches 1 km and the standby time is up to 10 years. Magic Bean hopes to use this button to link the smart home behind the router. To this end, Magic Bean CEO Lao Huang specially established an intelligent open platform. Magic Bean has chosen a long-term business model and will still rely on routers for profit in the short term.

Routing has a bright future, but it is too early to talk about "entry"

360 Security Router was at the center of controversy just because of a statement made by Zhou Hongyi.

360 router has always been a strategic product of 360, carrying 360's core business and shouldering the heavy responsibility of transforming from the PC mobile Internet era to smart furniture. However, in one of Lao Zhou's speeches, Lao Zhou believed that the first generation of 360 router was not good, which was generally interpreted by the outside world as a "failure of the router project."

When Hong Shu met Ren Feng, the 360 ​​router designer, he was still in a meeting. It can be seen that the recent excessive interpretation of 360 routers by the outside world has also caused him a lot of pressure. When they met, Ren Feng said that we did not stop the router project, but summarized the experience and lessons and carried out the second-generation design.

360 believes that the failure of the first generation was the result of being too "introverted". The 360 ​​router chose a difficult elliptical design, and the internal circuit board is also elliptical. The meticulously crafted internal structure design resulted in excessively high costs. According to Lao Zhou, the cost of the 360 ​​router is basically more than 200 yuan, but it was only sold for 140 yuan (it was also sold for 99 yuan for a period of time). The 360 ​​router put a lot of effort into it, but ignored the fact that as long as the router is properly set up, users may not need to touch it for a year.

According to the latest data released by Analysys, the total sales volume of China's household smart router market in the second quarter was 542,002 units. Compared with the traditional router market (about 60 million), it is still in its infancy. It is too early to talk about entry now. Ren Feng told me that if the volume does not reach a certain number, there is no way to talk about entry. Therefore, the price of the next generation of 360 routers will definitely drop, and the main concept of security will be guaranteed while ensuring stability and compatibility. This time, 360 believes that the software on the hardware can achieve 70 points, and put more energy into the areas that users can perceive.

Due to the important role that smart routers will play in the future smart home era, the router market is still a hot spot, and major manufacturers are rushing to make strategic layouts. However, now it seems that the router market is still in the stage of burning money. Before the shipment volume poses a substantial threat to traditional manufacturers such as TP-LINK and Tenda, the idea of ​​grabbing the entrance is just a financing rhetoric. However, with the increase in the number of terminal devices, the smart router market can still find its own breakthrough between green energy and commercialization, but it is unknown how many functions will survive by then.

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.