IoT trap homogenization crisis price war may become normal

The price war provoked by Jingdong Mall is spreading rapidly among e-commerce companies. The Internet of things industry has a halo of “strategic emerging industries”. Frequent price wars have been commonplace. No innovation, product homogenization has become an obstacle to the development of the Internet of Things. The most fundamental reason.

The homogeneity competition is serious. The reporter recently came to the entrance of the 4th China (Shenzhen) International Internet of Things Technology and Application Expo 2012. The staff took a handheld reader to scan the barcode on the journalist's visit card and verify it. The procedure is completed. This is the most common IoT identification application.

"A few years ago when it comes to the Internet of Things, many people do not know how to write these three words. Now the application of the Internet of Things has blossomed." According to Xiao Xiaoyu, Director of the Jiangsu Sailian Information Industry Research Institute, "The flower is in the fog." "Networking, cloud computing, cloud computing," has shown the momentum of development.

The State Council’s recent approval of Wuxi’s creation of a globally influential sensor network innovation demonstration zone is a sign of industry’s leap. The listed companies have also emerged from the wave of new markets in the secondary market.

Although policy support continues to transfusion and the industry is thriving, the hidden concerns in the Internet of Things industry are also worthy of attention. At this expo, the reporter noticed a special phenomenon. Whether it is overseas leaders, A-share listed companies, or small and silent companies, the products displayed are strikingly similar: most are all kinds of smart cards, all kinds of electronic tags and readers, and even include colorful access control. Cards, somewhat newer, are only Android-based industrial-grade bar code radio frequency identification (RFID) handsets.

At the exhibition site, many exhibitors even bluntly told reporters that these e-tags, readers access threshold is not high, such as access control card, the gross margin even less than 10%.

Normalization of price wars At the outbreak of the financial crisis in 2008, the Internet of Things has become a popular opportunity for everyone. Four years later, as large as the smart planet and small smart homes, Internet of Things applications have mushroomed. This sunrise industry has begun to face the growing pains of homogenous competition.

In the homogenously competitive industries, it is not surprising that there is a price war. Wang Dong, secretary-general of the Shanghai Institute of Electronic Labelling and Internet of Things, introduced: “The market price of an UHF RFID tag has dropped from 1 buck to 4 renminbi. I estimate it will soon be reduced to 2 mil.” The antenna of the RFID tag is mainly made of metal materials. He expects that the cost of the RFID system will be further reduced once the low-cost graphene antenna is widely used.

Ke Lu Electronics (002121) staff told reporters that the company's focus on the promotion of the Android system's industrial-grade bar code RFID handheld computer sold at more than 10,000 yuan, mainly used in power and other fields. However, the predecessor of this hand-held recognition machine, the QR code hand-held recognition machine, does not have such a high value.

The reporter learned that the QR code hand-held recognition machine was originally priced at more than 3,000 yuan according to the traceability system of the Ministry of Agriculture, and the pressure on competition dropped to about one thousand yuan. Some companies are struggling with this project.

Xu Yusuo, chairman of Yuanwang Valley (002161), told reporters that the current competition in the general field is too fierce, and the pressure of competition in the industry is relatively high. Eventually, disorderly competition may be formed, resulting in losses and losses.

“At present, the applications and frameworks of the Internet of Things industry are fragmented, lacking a unified concept and method, and at the same time there are serious industry and regional barriers, resulting in a large number of incompatible products, solutions and a large number of redundant construction. Demonstration projects have resulted in the waste of a lot of energy and resources; many attempts in the industry are only closed internal attempts, and it is difficult for the application providers to intervene. Therefore, it is difficult to eventually promote the scale of the Internet of Things industry.” China Electronics Association’s Internet of Things Commission Vice Chairman of the Board, Ma Jian, CEO of Wuxi Zhigan Xingji Technology Co., Ltd. was worried.