Wednesday, July 19, 2017

China Slow to Deliver AI Devices

When it comes to web businesses, China has created its own versions of a search engine (Baidu), e-commerce platform (Alibaba) and video-streaming service (iQiyi) with resounding success. Yet there’s a conspicuous absence of smart speakers such as the Amazon Echo or Google Home.

The market for devices using audio to deliver artificial-intelligence services is so nascent in China that few researchers track sales. Counterpoint Research estimates that 2 million smart-speaker units will be shipped in China this year, compared with 14 million in the U.S.

The question of adoption is about more than the devices -- it’s about which enterprises will control the delivery of AI-based services. In the U.S., Inc., Google, Microsoft Corp., Apple Inc. and Facebook Inc. are all battling to determine which will cement a place at the center of peoples’ digital lives. Amazon said this week that the heavily discounted Echo was the best-selling product during its Prime Day shopping event.

“The overall understanding and response for Chinese natural language in a conversational way is still not mature,” Tracy Tsai, a Gartner Inc. analyst, said. Poor audio recognition on devices produced by some Chinese makers are a key reason for the lack of adoption, she said.

There are also other factors why smart speakers aren’t taking off in the world’s biggest retail market, according to Kai Yu, chief executive officer of Horizon Robotics and founder of the Institute of Deep Learning at Baidu Inc., China’s biggest search engine. Many people, especially younger workers, tend to spend less time at home, where smart speakers are meant to be used.

“If you look at the popularity of the food delivery business, it shows people don’t have much time; young people spend most of their time either at work, or going to work,” Yu said. “There’s still some speculation on whether smart speakers will be popular in China.”

Beijing resident Tianran He doesn’t see a compelling reason to buy a smart speaker, and hasn’t heard of any of his friends or family members talking about getting one. “Having a speaker in the house and knowing it could pick up all the audio feels a bit weird to me,” he said.

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