Social networking apps (SNS) have become the flavor of the day among Chinese Internet firms, especially in the mobile space, and it’s rare to go more than a week or two without reports of a big new move by a major player in the space. Amid all that chatter, I was intrigued to read the latest report of an interesting new tie-up between leading microblog operator Sina (Nasdaq: SINA) Weibo and appliance maker Hisense (Shanghai: 600060) into the unlikely field of smart air conditioners.
I’ll be frank and admit I was somewhat skeptical when I first saw the headline announcing the tie-up, especially since the article appeared on one of Sina’s own news pages, touting Weibo’s move into the highly hyped “Internet of Things”. (Chinese article) But then read the article and became quite intrigued, as I realized that this was actually a product I might personally consider buying.
Before I discuss this smart air conditioner any further, I want to quickly illustrate my point about how SNS has suddenly taken over the headlines for Chinese Internet firms. All 3 of China’s telcos have announced major initiatives in the space over the last few months, and just this week leading e-commerce firm Alibaba joined the fray with the launch of its Laiwang mobile instant messaging (IM) app. Meantime, media are buzzing about a new function on Tencent’s (HKEx: 700) wildly popular WeChat mobile IM service that lets users pay to get special premium messages from their favorite celebrities. (English article)
The WeChat example highlights the biggest challenge facing all of these SNS developers, namely how to make money from apps whose basic services are usually free. Sina Weibo is one of the oldest SNS providers in the emerging field, and has been grappling with the monetization issue for the last couple of years now.
Against that backdrop, this new tie-up with Hisense looks like an intriguing way to bring in some more revenue to Sina Weibo’s coffers. I largely dismissed the tie-up after reading the headline, figuring it was just another gimmick, perhaps to let Weibo addicts follow their accounts from an LCD screen on their air conditioners. But a closer reading showed the new air conditioners actually allow users to turn their air conditioners on and off remotely using their Weibo accounts.
This kind of function is part of a much bigger group of apps often called the “Internet of Things”, which basically says that all kinds of devices will eventually be able to communicate with each other over wired and wireless networks, most notably the Internet. I’ve heard about this kind of app before, but have never actually seen one in widespread use, presumably due to technology issues.
That’s why this new tie-up looks quite intriguing, as it brings together industry leaders from the Internet and home appliance sectors to create a product that could easily find an audience. I can use myself as a good example, since I would love to have an easy way to remotely turn on my air conditioner using my mobile phone while riding the subway home after work. That would ensure that my home was nice and warm in the winter or cool in the summer when I walked in the door after a long day at the office.
Whether or not this Sina-Hisense tie-up will find a big audience remains to be seen, as marketing and product design will both be key elements to its success. But conceptually at least, this kind of product looks like an interesting and potentially lucrative new area for China’s growing field of SNS operators. Accordingly, I wouldn’t be surprised to see more similar Internet of Things tie-ups over the next year.
Bottom line: A new smart air conditioner tie-up by Sina Weibo and Hisense looks like a smart money-making move into the emerging Internet of Things.