With the launch of self-developed chips and operating systems, can Huami Technology take the road of independence?

Compared with increasing net profit, investing expenses in research and development is of greater significance to Huami at this stage, but all of this is based on the premise of high gross profit.

With the launch of self-developed chips and operating systems, can Huami Technology take the road of independence?

Image source: interface news

Following the launch of its own brand, Huami, which is not satisfied with the Xiaomi ecological chain, is still seeking innovation and change.

In 2018 and 2019, Huami released its self-developed wearable device chips-Huangshan No. 1 and Huangshan No. 2. At the recent Next Beat 2021 conference, Huami once again released the same series of next-generation chips-Huangshan 2S.

Like the previous Huangshan series, Huangshan 2S also uses a dual-core RISC-V architecture. According to Huami, its large core integrates FPU and supports floating-point operations, and its computing performance is increased by 18% compared with Huangshan No. 2. The operating power consumption of small cores is reduced by 56% compared with Huangshan No. 2, and sleep power consumption is reduced by 93%. Hour processing related sensors. Huangshan 2S also integrates a 2.5DGPU, and the image processing efficiency is 67% higher than that of Huangshan 2. In addition, the convolutional neural network acceleration processing unit on the chip can accelerate the identification of disease types, and the speed of identifying atrial fibrillation is 26 times faster than pure software calculation.

At the meeting, Chinese rice with co-founder Zhao Yajun introduced Road, Huangshan 2S chip was taped out in March this year to complete and apply the third generation Amazfit smart watch.

Compared with most instruction sets , the RISC-V architecture has the characteristics of open source, simple architecture, and easy porting of related systems. Three consecutive generations of chips have adopted the RISC-V architecture, reflecting Huami’s ambition to build an ecosystem. In response to this ambition, Huami also released Zepp OS, a self-developed smart watch operating system, at the conference.

With the launch of self-developed chips and operating systems, can Huami Technology take the road of independence?

Similar to the Huangshan chip series, lightness, low power consumption, and openness have become the characteristics of Zepp OS. According to Fan Meihui, co-founder of Huami Technology and the rotating president of the Global Innovation Center, the Zepp OS system package is only 55MB, which is about 1/28 of Apple’s watch OS. While ensuring the lightness of the system and improving the battery life, the Zepp OS system also maintains The operation is smooth, and the frame rate of most internal interfaces can exceed 60fps.

At the same time, Zepp OS is also equipped with a watch JS applet framework-Zeus Mini-Program Framework, which is convenient for developers to develop watch applets with a lower threshold. In the future, the same easy-to-use graphical development environment will be opened for dial design, etc. .

Healthy positioning is the key

Looking back at the wearable devices and algorithms released by Huami in the past, health and exercise have become its main product features. In the competition of wearable device manufacturers such as Huawei and Xiaomi that rely on mobile phones and smart terminals, this is also regarded by Huami as a competitive force in user experience.

At the hardware level, in addition to sports bracelets and watches, Huami has also launched treadmills, running shoes and other related peripheral products to monitor users’ health data in real time. At the algorithm level, Huami also launched its self-developed exercise engine, personal health assessment system, heart rate engine, blood oxygen engine, and sleep engine before.

At this conference, health has also become a key word. In addition to Huangshan 2S and Zepp OS, Huami also released its self-developed PumpBeats blood pressure monitoring engine. According to Wang Kongqiao , Vice President of Algorithm Technology of Huami Technology and Dean of Artificial Intelligence Research Institute , the engine has completed the first phase of the experiment, including 27 cases of hypertension, and analyzed a total of 354 data. It is expected to be the fourth this year. The quarter is officially available.

At the hardware level, Huami showed the stage research and development results of its investment team on portable MRI technology. Compared with traditional MRI equipment, portable MRI equipment with a height of only 1.5 meters and a weight of less than 0.8 tons continues to maintain the lightness characteristics similar to wearable equipment. It is understood that this machine was developed by an independent Chinese team invested by Huami at a cost of about one million yuan.

With the launch of self-developed chips and operating systems, can Huami Technology take the road of independence?

Looking back on Huami’s foreign investment in recent years, in addition to chip-oriented RISC-V commercial processor IP supplier SiFive, chip companies Nuoling Technology , GreenWaves Technologies, the medical and health field represented by Hyperfine and Promaxo, and multi-sports The sports field represented by sensor company Zepp and Physical Enterprises Inc (PEI) under the Adidas Group has also become Huami’s focus of investment.

For Huami, which started with wearable devices, the logic of improving product power through health and exercise is well understood. However, with the iteration of functions and the expansion of the scope of monitoring, when smart devices gradually approach the direction of medical devices, they will inevitably face regulatory difficulties.

The supervision of the safety and effectiveness of medical devices is one aspect. Secondly, the “Regulations on the Supervision and Administration of Medical Devices” stipulate that if the design, raw materials, production technology, scope of application, and use methods of medical devices undergo substantial changes that can affect safety and effectiveness, the registrant should apply to the original registration department for change registration. formalities.

This is undoubtedly a major limitation for wearable devices with a high frequency of replacement. In the interview, Huang Wang, chairman and CEO of Huami Technology, also said that the laws and regulations on the access of medical devices in the medical field have not yet been fully adapted to the development of technology. For this reason, Huami can only produce special models to match the monitoring functions of arrhythmia and atrial fibrillation.

Independence and open strategy

Since Huami launched its own brand, the market view of Huami “de-milletization” has frequently appeared. Judging from the financial report data, the proportion of Xiaomi’s ecological products in Huami’s total revenue has indeed shown a downward trend.

Huami’s financial report for the first quarter of 2021 shows that due to seasonal factors and the transition period of Xiaomi bracelet iterations, the shipments of Xiaomi’s ecological products decreased by 34.3% year-on-year, while the shipments of independent brands increased by 111.1%.

However, this product structure adjustment did not allow Huami to add points to the revenue data level. In the first quarter of 2021, Huami’s total revenue was 1.147 billion yuan, compared with 1.088 billion yuan in the same period last year, a year-on-year growth rate of only 5.4%, which is the lowest point of public financial report data. The gross profit margin in the first quarter was 22.5%, maintaining the same level as in 2020; after adjustments, it still lost 29 million yuan in the first quarter, and the net profit in the same period last year was 25.5 million yuan.

In an exclusive interview, Huang Wang told Jiemian News that compared with increasing net profit, investing expenses in research and development is of greater significance to Huami at this stage, but all of this is based on the premise of high gross profit. In the case of flat gross profit, compared to last year, Huami’s research and development expenses and marketing expenses in the first quarter of 2021 did have a substantial increase. In the financial report for the first quarter, research and development expenses increased by 28.7% year-on-year, and sales and marketing expenses increased by 65.5% year-on-year. This is also a major reason for lowering Huami’s net profit.

The consistent price-performance principle of the Xiaomi ecological chain determines that there must be an upper limit on the gross profit margin. This restriction is in contradiction with Huami’s strategy of “maintaining high gross profit to support research and development”. This may also be the reason why Huami is focusing on its own brand and increasing the research and development of a series of products other than wearable devices.

In addition to building its own brand, it is another focus of Huami to build an ecosystem by opening up its software and hardware capabilities.

On January 5, Huami Technology announced the acquisition of 29.99% of the issued shares of Yitong Technology for a cash consideration of RMB 959.6 million, and Huang Wang became the actual controller of Yitong Technology. At this conference, Huang Wang revealed that Huami has licensed its self-developed chip and operating system to Eton Technology, and Eton Technology will make more attempts in the IOT field based on this.

This opening is not open to all third-party competitors. Huang Wang told Jiemian News that the opening of software and hardware will face relatively simple application scenarios such as smart door locks. Huami hopes to build an ecosystem based on this. When the door lock and Huami devices use the same operating system, Bluetooth Unicom or even cloud Unicom, the ecology will naturally be established.

Huang Wang emphasized, “Maybe this is a very long goal, but in the long run this is our plan.”

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