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Text / Zuo’an
Source: understand notes (ID: wumiancaijing)
Half an hour after placing an order at the man-made counter, we tasted the hand-made coffee of rose and hawthorn made by “Orion star robot”. As for the taste, there is only one feeling – acid. Of course, this may be the unique taste of “punk” fruit coffee, but some people privately say that the higher the altitude of the coffee beans or coffee powder, the taste will be sour after the expiration of the coffee powder
This is a cooperation between Orion XingKong, a robot subsidiary of cheetah mobile, and Tongrentang online red coffee not long ago. Both sides set up a “punk health coffee” with robot hand washing as its selling point. However, there was not much punk element on the scene except the punk hat on the staff. Maybe they think that the robot coffee making thing is punk in itself.
Next to the coffee robot, you can also see a leopard’s secret of the “waiter” (officially known as the five-star AI intelligent service robot) holding up a “display board”. These slightly stiff robots don’t seem intelligent, but they are cheetah’s bet for a new era.
What does AI and robot bring
The gambling is because cheetah mobile, which returns to the domestic market, can not play many cards.
Like his old friend Wang Xiaochuan, who once set up a “three-stage rocket” for Sogou, Fu Sheng also made a “three-stage rocket” plan for cheetah Mobile: to obtain traffic through tool products, support the development of content products, and finally provide support for AI business. At present, the application of the first stage rocket — the tool type application encounters the ceiling; the second stage rocket — has not made much breakthrough in the content operation. Among them, the annual loss of live me has been split up in the third quarter of 2019 Musical.ly It also sold byte hopping, and in June this year, to make up for the company’s cash flow, cheetah Mobile has Musical.ly The byte jump shares acquired in the transaction are all sold.
In this state, AI has become the only choice for cheetahs to move the “third stage rocket”.
Looking at the financial report data of cheetah mobile, it can be seen that the annual revenue of AI business in 2019 is 143 million yuan, while that in the first quarter of this year is 31.76 million yuan, and that in the second quarter is down to 1945 million yuan. In other words, AI revenue in the first half of 2020 is only a third of that of last year. The revenue of 143 million yuan in 2019 is not high, and this year there has been a further decline. It can be seen that although the slogan of all in AI is loud, the business development is not smooth.
Today, Baidu, which once called out all in AI, has changed its voice, while cheetah mobile still adheres to its AI strategy, in which intelligent robot is a specific carrier of its AI technology.
According to Tianyan data, Orion star, a subsidiary of cheetah mobile robot, was established in September 2016. Up to now, XingKong has completed three rounds of financing, but the specific amount and valuation of other financing have not been disclosed except for round a financing of US $40.75 million.
It is Fu Sheng’s “diving” conference at the water cube in 2018 that makes the outside world really pay attention to Orion star sky. At the press conference on the same day, Orion star released a total of five products, including leopard secretary, which provides reception service, a peddler selling robot leopard, a children’s robot leopard dragon, a leopard speaker and a robotic arm xarm 7.
Today, four years later, according to public data, as of July 2020, more than 11000 robots of all kinds have been landed in the country. To tell you the truth, in the field of service robots, which are mainly enterprise customers and are not mature as a whole, such achievements are not too bad. However, cheetahs need more than such a report card.
In this regard, relevant Internet industry analysts to understand notes said: “cheetah’s robot strategy is more hardware oriented, this track is very difficult and crowded. High R & D investment and small market demand are bound to be a high-cost product with low output and low value, so it is difficult to open up a situation in the C-end market. ” In its view, at present, the enterprise robot market only includes logistics industry and a few other racetracks with high market demand, “but there are too many competitors in these vertical tracks, and their strength is not inferior to cheetah, including Alibaba, Jingdong, meituan and other domestic Internet giants.”
Perhaps at the beginning of joining the robot industry, Fu Sheng should have been ready for a long-term loss. After all, it takes time and capital to be an explorer in such an immature industry. Therefore, Fu Sheng chose to establish a subsidiary rather than as an internal project of cheetah mobile. After all, once the robot business with long-term loss is incorporated into the company’s financial report, it will seriously affect cheetah’s stock price.
However, all these assumptions are based on the premise that cheetah Mobile’s own revenue continues to be stable and can maintain continuous growth. The sudden setback in overseas markets makes this premise no longer exist.
Perhaps Fu Sheng didn’t expect to lose the overseas market which he was proud of in just two years. Now he is forced to return to his hometown to face up to its powerful competitors. AI and robot, which should have hidden their talents and kept a low profile, were pushed to the stage and became a new story for the public. And once launched, it was marked with the words “unique in the industry” and “whole chain”.
Photo source: Orion sky public information
As for the current situation of cheetah, relevant Internet industry analysts pointed out that “under the exclusion of overseas giants and the competitive environment of the overall market at this stage, cheetah mobile chooses to shift its focus back to China. However, although its external publicity has always been focused on AI and robots, cheetah’s most important task is to stabilize the basic business of tool-based products. After turning the focus of thinking back to the domestic market, cheetah mobile must also maintain the basic market in the fierce market competition. Only in this way can AI, robots and other new businesses have the soil for growth, otherwise everything can only be castles in the air. ”
It was a situation that cheetah mobile, which successfully sailed to the sea in those years, had never imagined to keep the basic plate of tool production business and get rid of the burden of content products and business.
After cheetah moves “retreat”
Before the byte skipping tiktok achieved unprecedented success, Fu Sheng and his cheetah mobile have always been representatives of domestic software enterprises. In North American market, byte beat acquired short video application in 2017 Musical.ly Later, it was incorporated into tiktok, which was regarded as an important decision of ziyue’s success in the North American market. and Musical.ly It was Fu Sheng’s Cheetah that was the early capitalist of Fu Sheng.
Once upon a time, the success of overseas business let Fu Sheng realize the feeling of success. Even for a long time, he showed people the image of “success tutor”. However, the cheetah at that time did not expect to encounter the “Dunkirk retreat” later.
In the early years, cheetah mobile successfully ignited the first stage rocket through tool based applications such as cleaning master, battery doctor, etc., and achieved good results in overseas markets and successfully landed on the New York Stock Exchange. However, due to the inherent drawbacks of tool based applications, such as single revenue model, user scale is easy to encounter bottlenecks and so on, it is difficult to ignite the secondary rocket. Fu Sheng himself is very clear about this, so he has been laying out the content business since 2015 and sold it to byte skipping earlier Musical.ly It was at that time that they invested.
In 2016, Fu Sheng called out the slogan of “all in AI” (start the third stage rocket). Baidu, which used to be all in AI, has changed its voice, and Cheetah Mobile has put its hope on the robot.
When the fuel of the first stage propulsion rocket, tool products, burned out, especially after a series of application products were taken off the shelves by Google in overseas markets, cheetah Mobile’s demand for the second battlefield became more urgent.
Among them, the incident of taking off the shelves in February this year was accidental but inevitable. In Google’s plan to crack down on advertising fraud and “disruptive” mobile advertising, all 45 applications of cheetah mobile in the Google play store have been removed from the shelves, while cheetah Mobile has been excluded from its advertising network by Google. You should know that 21.9% of cheetah Mobile’s revenue of 3.588 billion yuan in 2019 comes from Google, which means that more than one fifth of its annual revenue will disappear.
This is not the first time the Internet giant has been blocked by overseas mobile. As early as the end of 2018, Facebook terminated its business cooperation with cheetah mobile. For “disruptive advertising” applications, the giants are tough. Fu Sheng also said that although he has been trying to negotiate, he “does not have enough confidence in the short term” to resume cooperation with FB and Google.
In the face of this situation, return has become the only and necessary choice for cheetahs. After the release of the financial report in 2019, Fu Sheng said that he would focus on the domestic market next.
But returning to the domestic market is not easy. In his early years, Fu Sheng emphasized that entrepreneurs should give priority to those markets that have not yet been fully developed, such as Southeast Asia and even Africa. These markets were chosen because the competition was relatively slow. Cheetah mobile also took the same consideration when it went out to sea because of the fierce competition in the domestic market.
It can be seen that cheetah, the top tool product, will return its focus to the domestic market, which means it will face strong competitors such as Tencent and 360. Therefore, from the perspective of market competition, cheetah’s main business has little space in the domestic market, but now it has to come back.
Fortunately, after the overseas market was hit hard, cheetah mobile handed in a good performance sheet.
According to the second quarter financial report released by cheetah mobile on August 18, the total revenue of cheetah mobile was 394 million yuan (down 59.4% year-on-year), but it exceeded the performance guidelines given in the previous quarter; the net profit attributable to the shareholders of cheetah mobile was 194 million yuan, 48.5 million yuan in the same period of last year; the net profit attributable to the shareholders of non GAAP was 244 million yuan, which was 82.5 million yuan in the same period last year. Of course, the main credit for this is to sell byte jump shares, which is the main source of “other income of 453.5 million yuan” in the financial report.
To be honest, it is not easy to show such performance in such a special period. After the release of the financial report, cheetah’s share price also rose, up nearly 15%.
But a close look at the excellent financial report can be found behind the continuous decline in revenue, as well as the extreme tension in cost.
Increasing income and reducing expenditure is the core work of enterprises in the low period. In the second quarter financial report, the cost of cheetah mobile was 113.7 million yuan, a year-on-year decrease of 65.2%; the total operating expenditure was 463.4 million yuan, a year-on-year decrease of 33.7%. However, it also includes R & D investment, which has been reduced for two consecutive quarters. Its R & D expenditure in Q4 of 2019 was 153.5 million yuan (down 19.7% year-on-year); in 2020, Q1 again decreased by 27.6% year-on-year to RMB 142.6 million yuan.
In the process of “cutting expenditure”, its revenue has fallen into a state of constant decline. At present, cheetah has only achieved the goal of reducing expenditure, but has not realized open source. According to the financial report data of cheetah mobile in the past two years, the overall revenue of cheetah is 1.085.6 billion yuan in Q1 of 2019, and only 528.1 million yuan in the second quarter of this year. At the same time, the company’s share price has fallen from $3.30 at the end of 18 to $1.87 now (as of September 28), with a market value of only 262 million.
Obviously, the capital market has not recognized the practice of increasing profits by reducing costs in this state of revenue decline.
Now Fu Sheng has rarely come out to teach “successful experience”, after all, the performance of cheetah’s movement is difficult to bring enough confidence for it. Re entering the domestic market, in the Red Sea and niche markets, it is difficult to survive only by reducing the company’s operating costs. We expect Orion star to build its own “vertically integrated AI capabilities”, including real breakthroughs in self-developed chip computing power, algorithm ability, system capability, application ability and commercial brain. However, all this can not be achieved by labeling “industry unique” and “whole chain AI technology”, but by truly continuing to practice.
(statement: This article only represents the author’s point of view, not Sina’s position.)