Sogou hardware completely exits, and there is no "small but beautiful" intelligent hardware?
Recently, sogou announced that due to business adjustment, sogou hardware products will officially stop service at 23: 59 on May 30, 2024.This indicates that sogou’s hardware products such as Sugar Cat Watch, Sugar Cat at Home, Sugar Cat Dictionary Pen, sogou Translate Pen and sogou Recording Pen will no longer provide any online services, technical support or maintenance services.In order to ensure the safety of users’ personal information, sogou promised to delete all users’ data safely after the service stopped, and reminded users to back up relevant data in time.
Source: sogou
Since it was incorporated by Tencent, at least ten businesses of sogou have been shut down one after another, including sogou, sogou Reading, sogou Lending, sogou search App, sogou Map, sogou Game Center, sogou Internet Alliance and so on. With the adjustment of various businesses, many former sogou people who merged into Tencent’s non-core business departments mostly left after several rounds of business adjustment.
Hardware exits, and everything has a warning.
Intelligent hardware was once regarded by Wang Xiaochuan, then Sogou CEO, as the second growth curve of sogou except the combination of search+input method+browser. In his plan, the proportion of intelligent hardware in sogou’s overall revenue will reach 10%, but it did not reach this standard until sogou was acquired by Tencent.
Sogou’s last financial report before delisting showed that in the second quarter of 2021, sogou’s total revenue was US$ 147.5 million, of which search and search-related business revenue was US$ 137.2 million, down 43% year-on-year, accounting for 92%; The non-search revenue, including intelligent hardware, was $10.3 million, accounting for less than 10% of the revenue.
Although this part of the decline in revenue is mainly due to the company’s strategy of shrinking non-core business, sogou’s intelligent hardware is not without struggle. In fact, sogou’s intelligent hardware business also had its own highlight moments.
On December 8, 2014, sogou officially launched the company’s first intelligent hardware device-children’s smart watch "Sugar Cat", announcing the exploration of opening intelligent hardware business.At that time, it was the time when the intelligent hardware industry flourished. Sugar Cat, which was established only one year ago, achieved quite good results in the 618 promotion in 2015 and became the double champion of sales and reputation of children’s smart watches.
Source: Baidu Encyclopedia
After that, sogou successively released intelligent hardware products such as dictionary pens, recording pens, translation treasures and translation pens. In 2018, JD.COM, a travel translator named sogou, was first put on the shelves, with sales exceeding 10 million, winning the first place in the same category in JD.COM; In 2020, the sogou recording pen S1, which was priced at over 3,000 yuan, was put on the first show live room in Tik Tok, Luo Yonghao, and gained 48 million cumulative viewers.
The above list is one of the few highlights of sogou’s intelligent hardware business. Since its development in 2014, sogou’s intelligent hardware business has occasionally improved, but the competitors of each subdivision track are too strong. At the children’s smart watch track, there are manufacturers focusing on children’s watches such as Little Genius and Abachi, as well as digital manufacturers such as Huawei and Xiaomi, which have developed from smart watches across the border. In hardware tracks such as translation pens, dictionary pens and recording pens, there are also giants such as Iflytek, Netease Youdao, Alibaba and Baidu competing for competition.
Source: sogou
Taking dictionary pens as an example, as an important part of intelligent education hardware, it is difficult for sogou to cross the two mountains of Iflytek and Netease Youdao. According to the online monitoring data of RUNTO, in 2023, the retail volume of the online open retail market of dictionaries and pens in China (excluding e-commerce companies with content such as vibrato) was 3.626 million, and the sales volume reached 1.78 billion yuan.
Among them, Iflytek’s Alpha Egg and Netease ranked first and second respectively, accounting for 54% of the domestic market, while the TOP10 brands such as Aifen, Little Genius, samtwos and BBK only occupied single-digit market share, and sogou was directly reduced to Others.
Dictionary pens are only the epitome of sogou’s smart hardware business. After careful observation, it is not difficult to find that most of the products launched by sogou after joining the smart hardware track are aimed at specific people and specific businesses.It’s not that there is something wrong with the idea of choosing the track, but that compared with competing products, the products don’t show the advantage of continuously attracting the target group, and multi-line operations all face the same problem, so it’s not surprising that sogou’s hardware business ended up like this.
Sogou is lonely, with little business left.
Looking back on the development of sogou in the past 20 years, it left its own trace in the Internet PC era in China, and it had a history with Internet giants such as Sohu, Alibaba and Tencent.
In 2003, sogou engine was hatched in Sohu, but at this time, Baidu was firmly at the top of domestic search engines, leaving little room for sogou to play. Subsequently, the sogou input method gained a good reputation from users because of its convenient and accurate pinyin input and rich related vocabulary. According to public information, around 2010, the user utilization rate of sogou input method reached 79.7%, far ahead of other input methods, and this advantage was not surpassed by Baidu until 2020.
In this process, Wang Xiaochuan, the former CEO of sogou, put forward a three-stage rocket traffic conduction model of "input method-browser-search", which was once regarded as a classic business model by the search industry. like thatWith the advent of the mobile Internet era, the traffic portal has shifted, and the cross-application jump obstacles have made the information collection and integration ability that search engines are proud of fail. Sogou has also been gradually marginalized in a new wave, and the original search engine and input method have also withdrawn from the core competition circle.
Source: sogou
It can be said that since sogou announced the completion of the merger with Tencent on September 24th, 2021 and became an indirect wholly-owned subsidiary of Tencent, sogou, as the afterglow of the PC Internet era, can already foresee what will happen next. That is to say, the core business is integrated into Tencent, and the marginal business is gradually retired, which is particularly obvious in the peak period of Internet companies’ cost reduction and efficiency increase, and the unprofitable business is ushered in a large-scale contraction.
After sogou shut down the intelligent hardware business across the board, there are not many business lines in sogou that we can see on the bright side. Maybe sogou Input Method will leave quietly one day.By then, we can only find traces of sogou’s existence in Tencent products that have been integrated into sogou business, such as WeChat Watch and Search.
The strong are always strong, and there is no "small but beautiful" in intelligent hardware.
While remembering, we still have to face up to the fact that sogou quit the hardware business, and what the rest of the players in the intelligent hardware track should do to live longer.
In sogou’s intelligent hardware subdivision track, Xiao Lei saw a common trend: the strong will always be strong.A small number of head brands occupy the vast majority of the market share. Only when emerging brands stand out in the brutal market competition can they survive on the track, which is more obvious in the fields of educational hardware such as children’s smart watches, dictionary pens and learning tablets.
Source: Counterpoint
However, the closure of sogou’s hardware business is attributed to many reasons. First of all, the smart hardware market is fiercely competitive, and emerging brands and new technologies are constantly emerging, which makes sogou’s smart hardware products face challenges in function and innovation. When innovation can’t keep up with the market demand, consumers will naturally choose products of other brands, which can be intuitively reflected from the sales situation.
Secondly, the functions of smart phones are becoming more and more powerful, and many functions that can only be enjoyed by hardware products are integrated into smart phones, which makes it difficult for a single function of hardware products to meet the market demand. Only when hardware products adapt to market changes and user needs in time and create more professional functions can they attract target groups.
In addition, the maintenance and update of hardware products need continuous investment. Most of sogou’s revenue comes from search business, so it is obviously unrealistic to ask it to invest in intelligent hardware business that doesn’t make much money regardless of the cost. Later, we also saw that sogou made business adjustments based on cost and strategic considerations.
In the intelligent hardware market, small brands often face more severe challenges than big manufacturers. The closure of hardware services in sogou reflects the shortage of small brands in technology, capital and market competitiveness.
In the rapidly developing science and technology industry, continuous technological innovation is the key to the survival and development of enterprises. Large factories usually have strong R&D teams and abundant technology accumulation, which can quickly respond to market changes and launch innovative products. In contrast, small brands have limited investment in technology research and development, and it is difficult to keep up with the technological progress of the industry, resulting in products gradually falling behind in function and performance.
Source: small degree
With the advantages of scale and good profitability, large factories can invest more resources in product development and market expansion. However, small brands often have limited funds and cannot afford high R&D and marketing expenses, which limits their development space to some extent.
However, this does not mean that small brands have no room for survival and development. In Xiaolei’s view, accurate market positioning and technological innovation with memory points are the few opportunities for small brands to find a foothold in the intelligent hardware market.
Specific to products, children’s smart watches do not have high requirements for entertainment functions. It is the real demand of parents for children’s smart watches to create various learning functions, more convenient instant messaging, similar positioning and other security functions around educational scenes. Dictionary pens need to be innovated in translation accuracy and ease of use. Supporting more languages and accurate translation are only entry standards, and what really separates the products is the use experience for different scenes. The recording pen may strengthen the integration with cloud services to provide more efficient recording and information management solutions.
Although many sub-tracks of intelligent hardware products have different development trends, from the general perspective, versatility, intelligence and scene are the directions that every track needs to pay attention to. Netease Youdao, Baidu Xiaodu, Iflytek and other brands have begun the deep integration of AI+ products/applications. The products and applications such as Xiaodu learning machine Z30 and AI general learning assistant "Youdao Xiaop" APP have derived new usage scenarios and capabilities with the help of AI technology, such as AI assistant with smarter interaction, AI learning and other functions.
Just as the mobile phone, computer, TV and other industries have experienced, the intelligent hardware industry will eventually usher in the AI process of each subdivided track. Lei believes that this is also the general trend of intelligent hardware development in the future.
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