iFlyTek is a leader in voice-related tech. Founded early, in 1999, the company has helped build the voice-over field into the present cutting-edge sector, with its voice interaction and natural language processing. Tech-driven companies have a relatively high net profit margin, of an average of 17%, and iFlyTek is no exception – its predicted net profit margin for 2019 is as high as 63%.
From its starting point in voice tech, iFlyTek has been exploring more AI-based functions –its research and development (R&D) expenditure absorbs over 20% of revenue. In the first half of 2019, the company spent CNY 1.2 billion (USD 181.6 million) on R&D, while spending in the previous year was CNY 1.8 billion (USD 258.8 million). iFlytek's business is also expanding to smart city concepts, smart education, IoT and other areas.
The tech-savvy company is a member of the national AI open platform league. Along with Baidu, Alibaba, Tencent and SenseTime as the first batch, iFlyTek is leading the smart speech AI open innovation platform. Other companies are responsible for autonomous driving, smart cities, healthcare and computer vision.
Being predominant in voice recognition, iFlyTek provides consumer-end voice services like a smart voice assistant. The advantages of voice interaction benefit the company's IoT business development and help it compete with other smart city AI players. As the backbone of China's voice recognition field, iFlyTek's business partners are mostly from the government side and enterprises. The penetration rate of its product use in law enforcement departments is around 90%; it provides smart education services for over 250,000 schools in China.
Yet, since being blacklisted by the U.S. in 2019, iFlyTek has kept growing steadily at a high speed. iFlyTek attributes the high growth to its strategic moves on AI. The company has been betting heavily on AI with both cash and talent. The return is also apparent: records show ownership of 787 patents in 2018 with a YoY revenue growth of 45.4% for the same period – the company reported revenue of CNY 7.9 billion (USD 1.2 billion) in 2018 – and the trend seems to have been sustained in 2019