A Tale of Two Eras: ByteDance from AI to AIoT
ByteDance confirmed its plan of developing an education hardware product. Despite unsuccessful attempts, it is keen on expanding into this field. ByteDance could start building its own AIoT infrastructure and ecosystem by rolling out its education hardware.
On May 29, TikTok's parent company ByteDance confirmed its plan of developing education hardware product.
As early as January 2019, ByteDance has acquired a patent portfolio and hired employees from Smartisan/Chuizi Technology (锤子科技), a Chinese technology company specializing in consumer electronic devices. It then registered six trademarks under the name of Zijie Chuizi, literally "byte hammer." At the time, ByteDance had released its plan to explore the education area.
ByteDance has the reputation as an "app factory" by intermittently releasing apps for mobile users, the most famous of which include the short-video platform Douyin (the domestic version of Tik Tok), and news aggregator app Toutiao. As of January 2019, the apps had provided ByteDance with more than 600 million DAUs and upwards of 1 billion MAUs, generating a substantial amount of advertising revenue.
The secret behind the massive traffic flow is the underlying AI algorithms. By tracking user behaviors and feedbacks – browsing history, time spent on each item of content, time of the day to use the apps, comments, favorites, and dislikes – the apps push interesting contents to target users to retain. Larger user base helps refine the algorithms, resulting in more accurate contents recommendations and more data to the satisfaction of both users and advertisers.
Though valued at as high as USD 75 billion, ByteDance has seen an moderation of its growth in the domestic market, where it derives most of its advertising revenue. In 2019, ByteDance takes more measures to find new monetization possibilities and build its competency in the coming IoT era.
A history of failures
Expansion into dducation was a key strategy for ByteDance in 2018. In February 2018, ByteDance launched an app called HaoHao XueXi (Good Good Study) (好好学习), which was similar in functionality to pay-for-knowledge apps such as Dedao (得到) and Ximalaya FM (喜马拉雅); in May, ByteDance unveiled one-on-one English tutorial service Gogokid, benchmarking VIPKID and Dada English; in December 2018, it introduced a Neural Network algorithm-based English teaching product called aiKID.
None of the moves has succeeded so far but ByteDance is still enthusiastic about the education sector. On May 9th, it launched Dali Ketang (大力课堂), a K12 online education platform, offering courses for students during the upcoming summer vacation. This is another saturated market with established incumbents such as Xueersi (学而思) and Yuanfudao (猿辅导).
A move to AIoT
It's common for Internet giants to expand to the hardware market. Amazon, Google, Facebook, and Microsoft have all dabbled in the manufacture of smartphones and smart home devices. China' s BATJ (Baidu, Alibaba, Tencent, and JD.com) also have tapped into this market.
With the development of 5G and NB-IoT, AIoT opportunities proliferate in the consumer market, and IoT devices become the new traffic entrance and edge data and computing center. According to the recruitment page of ByteDance's website, the company is looking for hardware engineers and experienced smart devices product managers. Educational hardware could well be a starting point and more smart devices are expected.
ByteDance could start building its own AIoT infrastructure and ecosystem by rolling out hardware products. And the AI-enabled content recommendation capabilities, coupled with its enormaous user communities, will likely be a bridge for it to transition into a new era.