Investment Research Team
ByteDance is reportedly investing heavily in AI hardware, potentially exploring the launch of wearable stereo earphones or handheld AI devices, according to Chinese media reports.
The Chinese social media giant is taking inspiration from American conglomerate Microsoft, aiming to establish an AI hardware and software product ecosystem that integrates users on both fronts.
ByteDance, the parent company of TikTok, has been investing in large language models (LLMs) and has launched numerous consumer-facing and enterprise-facing AI software products, which China Money Network has covered extensively in the past (see related stories).
Despite its significant investments in hardware in the past, ByteDance hasn’t had much success. However, the company has accumulated experience in hardware products and has a team of talented individuals capable of launching successful hardware products.
ByteDance’s exploration in AI hardware is reportedly divided into two product lines. One product line is codenamed "D Line," headed by Li Haoqian, the founder of the OWS (Open Wearable Stereo) earphone brand Oladance, which ByteDance recently acquired. The Oladance team is being integrated into ByteDance’s system under the Mobile OS Middleware Business Unit.
The other product line is codenamed "O Line," also led by the founder of a company previously acquired by ByteDance. The O Line is a cross-organizational team that not only undertakes ByteDance’s AI hardware exploration but also closely collaborates with ByteDance’s AI application team, Flow. Established during the pandemic, the O Line carries the expectations of ByteDance executives for hardware terminal exploration.
A ByteDance official told Chinese media outlet 36Kr that its chatbot Doubao is exploring integration with smart wearable devices to provide users with a more natural and convenient interaction experience. Additionally, Doubao will open its capabilities to various hardware manufacturers, fostering collaboration between hardware manufacturers and Doubao’s large models/Doubao AI assistants.
ByteDance’s senior management has drawn inspiration from Microsoft’s product strategy and business system for their approach to AI hardware products. Microsoft’s consumer-grade hardware includes personal computers, while its software ecosystem spans from the Windows operating system to collaboration tools like Teams.
ByteDance has a similar setup with Feishu, akin to Microsoft’s Teams, and an AI unit called Flow, responsible for large language model (LLM) research and development. ByteDance has unveiled several LLMs for various applications. However, what it lacks is a comprehensive consumer hardware product lineup.
The specifics of the handheld devices ByteDance is exploring remain unclear, but the company is reportedly seeking cooperation with manufacturers like Xiaomi and Gionee. It is uncertain whether any agreements have been reached.
ByteDance founder Zhang Yiming is highly attentive to the exploration of AI hardware. The company is also closely monitoring potential hires from the mobile phone industry to strengthen its team, according to the reports.
The industry’s enthusiasm for AI hardware exploration is driven by the need for innovation and new form factors, as PCs and mobile phones, which have dominated for years, now face bottlenecks in both innovation and shipment volumes. This has created an urgent need to explore the next generation of general computing devices.
Although ByteDance is renowned in the application domain, known in China as the "Apps Factory," its hardware explorations have not been successful in the past.
In 2019, ByteDance announced the acquisition of smartphone company Smartisan, launching products such as the Nut Pro smartphone and the TNT display kit. In 2020, ByteDance established the "Dali Education" brand and began developing educational products like desk lamps.
After two years of unsuccessful exploration with Smartisan smartphones, ByteDance quickly announced it would cease developing smartphones and integrated the original Smartisan team into the educational hardware team.
In 2021, ByteDance made a high-profile acquisition of the headset manufacturer Pico for 9 billion yuan. However, less than two years later, the Pico OS team was merged into ByteDance’s product development and engineering architecture middleware, leading to significant layoffs.
For ByteDance, this new venture into AI hardware research and development signifies not only a transformation in product form but also a fundamental shift in interaction methods and content acquisition methods.
Despite previous challenges with Smartisan smartphones and the Pico headset, ByteDance has accumulated considerable knowledge in hardware project management and interaction operating systems. It remains to be seen how successful it will be in its AI hardware foray.
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