Internet giants lay out smart hardware platforms: developers worry about becoming puppets

What is the most popular entrepreneurial direction in China in 2014? Without a doubt, it is smart hardware.

According to a recent research report by market research company ON World, it is expected that by 2018, the global sales of smart watches will reach 330 million units, exceeding the 4 million units in 2013. The market for the entire wearable device, smart home and even car field will be even larger.

Chinese Internet companies will not easily miss this huge market. Recently, Tencent (125.3, 0.20, 0.16%, real-time market ), WeChat, JD.com (27.79, -1.17, -4.04%) and Alibaba ( rolling news ) have launched smart hardware platforms to attract developers to join. The ambitions of the giants are clearly visible as they set up their positions in advance to manage the smart hardware industry, which is still in its infancy.

The value of the platform

With the help of powerful e-commerce channels, the smart hardware platforms provided by JD.com and Alibaba basically cover a one-stop service from production to sales; Baidu (191.2, 1.24, 0.65%) and Xiaomi are currently in the stage of investment layout; and 360's strategy is still relatively unclear, and it has only launched its own brand of smart hardware. Some developers believe that as the amount of data increases, data security issues may become increasingly prominent, and 360 may also use "security" as an excuse to attack smart hardware.

One of the most popular platforms at present is WeChat. WeChat's approach is to allow smart hardware to synchronize and manage the data of different smart hardware through WeChat public service accounts, and connect these data with WeChat's social relationships to provide users with functions such as sharing in Moments. In addition to being able to replace Apps for data management through public accounts, public accounts can also achieve information settings, data record analysis, etc., and connect with JD's channels.

The smart hardware platform launched by JD.com is quite similar. Users only need to use the JD Cloud Assistant App to manage all smart hardware connected to the platform. This approach of using Apps to gather developers has, to some extent, reduced the cost of developing Apps for hardware entrepreneurs, allowing them to focus more on hardware development, and users do not need to download and install other Apps again.

The social relationships provided by the platform attract developers in droves. Guo Hui, co-founder of Shiyun Medical, said that social relationships help to spread word-of-mouth about products, and the role of channels allows more room for hardware sales. The sales volume of hardware determines the possibility of subsequent business model transformation. Currently, they have connected to the two major platforms of JD.com and WeChat.

Many manufacturers also connect to smart hardware platforms for funding, channels and supply chain reasons.

Wang Hao, CEO of Huanteng Technology, said in an interview with a reporter from 21st Century Business Herald that there is currently no channel website in China that specializes in serving innovative products. Listing on e-commerce platforms requires stocking up, which places extremely high demands on cash turnover. "To make a small product, you need to have millions of dollars to make a profit." Wang Hao told the reporter from 21st Century Business Herald that Huanteng Technology wanted to sell its products on channels such as Suning and Gome, but after careful calculation, the funds were not small and it could not be done without financing.

In addition to providing support to entrepreneurs in terms of channels, JD.com and Alibaba are also making arrangements in the supply chain. JD.com's "Smart Cloud" has achieved strategic cooperation with the three major domestic WiFi chip providers and cooperated with Shenzhen chip e-commerce website Cogolink.com. For a long time, smart hardware entrepreneurs have been unable to communicate directly with traditional suppliers because of the small demand for chips. Cogolink's e-commerce platform can uniformly connect entrepreneurs with the supply chain and help entrepreneurs get cheaper prices. Alibaba provides entrepreneurs with the underlying chip solution services for products.

In addition, Wang Hao said that increasing exposure also requires money, and joining the giant's platform will also play a marketing role. "Many things are known to people in the industry, but it is difficult for ordinary people to obtain information about these products."

Concerns of entrepreneurs

Currently, Internet giants provide various supports to entrepreneurs, trying to establish an industry chain similar to the "developer-publisher-channel operator" of mobile games. The giants' platforms are similar to publishers, providing developers with various services and distributing products to various channels. Finally, the three links of the industry chain share the revenue.

However, some smart hardware developers revealed that it is necessary for entrepreneurs to obtain support from the platform, but they also have some concerns: "Once you are on this platform, you become a 'puppet' of this platform to some extent."

"It would be fine if the giants' platforms were simply for distribution, but the key is that they also have control over the software field to a certain extent. We are very worried about this. In this way, users will have no need to open our app." said the smart hardware developer mentioned above.

Although on the surface, entering the giant's platform has many benefits, and many developers also need various conditions and support from the giant. However, entering this "entrance" to smart hardware means losing control of the hardware, which is a fatal problem for entrepreneurs.

Many entrepreneurs, especially those in Beijing, only have an Internet background, no factories, and no core competitiveness in hardware design. In their eyes, how to make the App experience better, how to better collect data and provide services based on data are their strengths. Some developers can even be said to be "clean" about the experience.

In addition, many platforms currently use data to connect with hardware developers. He Gang, chief scientist and vice president of cloud platform of JD Mall Group, previously stated that JD will open up App data and provide support for the backend and downstream ecosystem and service providers. "We hope that all hardware can be connected, so that everyone can unite and connect the data, which will ultimately benefit consumers." He Gang told reporters.

Although the reasons for the giants to share data are very good: all smart hardware can be controlled by one app to avoid user data fragmentation, some smart hardware developers believe that "consumers are not necessarily that smart. They will think that it is the platform that makes things smart, rather than the functions provided by the hardware itself, and they do not recognize my value." They believe that with the platform's super app, developers can easily become a hardware manufacturer and fall into an industry with very low gross profit.

At present, in addition to a large number of entrepreneurs rushing in, many large home appliance companies are also entering the smart hardware industry, hoping to transform the Internet. "If the platform takes away all the data, home appliance manufacturers are still just manufacturers, and those who sell washing machines are still selling washing machines. How can they transform?" The above developer told the 21st Century Business Herald reporter that many platforms' practices are equivalent to asking developers to hand over the control of hardware and data directly to the platform. Once the data is connected to a certain platform, the so-called data sharing is limited to its own ecosystem and cannot achieve a real sharing effect.

Platform selection

In fact, smart hardware entrepreneurs all have a great dream: to form an industrial closed loop, or even become the "next Apple (94.03, 0.55, 0.59%)". However, the ownership of data and the control of smart hardware are not in their own hands, which makes some developers fear the platform.

Zhang Ming, CEO of Kaibu Care, said that they do not have the same concerns as the above developers. He believes that in the era of mobile Internet, there should be a sufficiently open attitude to access the platform.

"The core competitiveness should be based on what you are good at, whether it is algorithms or data analysis, which is in your own hands. The relationship between you and the platform is one of mutual benefit." Zhang Ming told the 21st Century Business Herald reporter that developers can gain user convenience and customer volume from WeChat. If they want to obtain these two resources, they must cooperate with WeChat.

Zhang Ming said that currently, the big platforms are providing basic services and there is no need to worry that they will use the core of developers' hardware and algorithms. The data level should be a parallel state for both parties and will not affect developers' data analysis.

"If you only want to create a closed loop, you will only trap yourself. You need to look at how to turn the platform into your own value objectively," Zhang Ming told the 21st Century Business Herald reporter. Moreover, if the giants really want to intervene and make the same products themselves, small companies will not be able to resist and can only accept it with an open mind and make themselves bigger.

Guo Hui told the 21st Century Business Herald reporter that the more a company builds a platform, the less likely it is to get involved in the production of hardware at the front end. Large platforms can only cover breadth but lack depth. Moreover, if the platform does not have unified standards for front-end hardware, although a lot of data can be accessed, the errors caused by data analysis will be greater.

"The services provided by smart hardware require a complete operating system, and the entrepreneurial team needs sufficient funds to support the next stage of development." Guo Hui said that if the platform is big enough, they will not be able to go deeper into this field. It must not be the platform itself that provides the service because they do not have enough energy.

"The platform's main focus is on control, but if the entrepreneur has professional services himself, then there is no need to worry about no one opening their app." Guo Hui said that Shiyun Medical is cooperating with a famous medical laboratory in the United States to provide personalized suggestions based on changes in users' vital signs, which may be difficult for large platforms to do.

"If my goal is to use a single product and my profit comes from hardware revenue, I can rest assured to cooperate with the giant's platform. But if I want to sell a series of products and make profits from services, then there are certain problems with the model of cooperation with the giant." The above-mentioned developer who opposes the giant's platform believes.

Zhang Ming believes that if the platform can provide resources to reduce its own costs, it might as well conduct a trial cooperation to see if it can be formed. If the platform services are limited, it will not affect its overall ideas and operations.

However, although entrepreneurs have different views on platforms, small platforms are also emerging. For example, Shenzhen has platforms such as Dianmingshijian and Ketongxincheng's Hard Egg Competition. Wang Hao believes that the purpose of small platforms such as Dianmingshijian is relatively simple, which is to simply obtain funds for entrepreneurs through crowdfunding, and provide distribution services if necessary.

It is understood that Dianmingshijian received millions of dollars in Series A financing at the beginning of this year, and Cogobuy has attracted many developers to use this component e-commerce through the Hard Egg Competition. On July 4, Cogobuy also announced that it will be listed in Hong Kong on July 8, intending to raise 1.1 billion to 1.54 billion yuan, and the IPO price is equivalent to the company's 2014 forecast price-earnings ratio of 14.7 to 20.6 times.

In fact, the current smart hardware products are similar to mobile games, and their success is somewhat accidental, which has led to the emergence of some companies that avoid product risks and use their own resource advantages to switch to distribution. According to the 21st Century Business Herald reporter, many small companies are also preparing to start the path of hardware distributors.

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.