GIMI CEO Xiao Shi Talks about Making In-Car Devices: Targeting High-End Vehicle Models to Recreate Home Theaters in Cars | Exclusive Interview with 36Kr
Author｜Song Wanxin
Editor｜Zheng Huaizhou
The continuous contraction of the domestic projector market is an indisputable fact. As a result, XGimi, the industry leader in a difficult situation, has been adjusting frequently in recent years. The latest news is that XGimi has officially entered the in-vehicle business. According to the official disclosure, XGimi has so far won six pilots.
It is unexpected but also reasonable that XGimi, which has been doing business in the C-end for ten years, has decided to enter the B-end.
When XGimi was just listed in 2021, it was extremely popular and even created a historical record of single-signature profit in the STAR Market. At that time, the logic that the capital market traded for XGimi was "projectors replacing televisions".
However, this logic has not been fulfilled as expected, or has been disproved in the short term.
The demand of users for "projectors replacing televisions" is not strong enough. Coupled with the tightening of consumers' budgets, in the second year after the IPO, the revenue growth rate of XGimi quickly dropped to a single-digit, followed by the industry's deceleration, a sharp drop in the stock price, and a sharp decline in net profit.
In just two years, the changes in the domestic market have caught XGimi off guard. What XGimi did not expect is that in the domestic market, LCD TVs are too strong, resulting in the penetration of projectors being far less than that in the overseas market.
In the latest financial report, XGimi's report card is still not good. After the profits returned to positive in the fourth quarter of last year and the first quarter of this year, XGimi's net profit suffered losses again in the second and third quarters of this year, with losses of approximately 1.022 million yuan and 44.43 million yuan respectively.
XGimi must make a change. For choosing the second growth curve, the focus of the internal discussion of XGimi is whether to choose to take a bigger step to enter fields such as AI, or to act based on its own advantages with a smaller step.
In the conversation with 36Kr, Xiao Shi said that the in-vehicle is the most closely related to XGimi, and it is also the fastest-growing sector in the market. Moreover, from the perspective of the industrial chain, the upstream partners can also provide the greatest assistance, so it is the most suitable track for XGimi to enter.
In terms of product structure, XGimi currently focuses on in-vehicle projection and intelligent headlights, and is also exploring other applications of projection technology in the vehicle with the vehicle manufacturers.
According to XGimi's observation, among all the applications of projection in the vehicle, the market of intelligent headlights is more certain, and others are still in the exploration stage.
In fact, the in-vehicle is a common choice for many projector peers. Appotronics has already entered the in-vehicle field one step ahead of XGimi, and has now included nine pilots. The industry's first vehicle-grade projection giant screen installed in the WENJIE M9, which was listed in December last year, comes from Appotronics.
In-vehicle projections are generally equipped on large-sized models with a price of more than 300,000 yuan. Therefore, from the perspective of the demand side, the audience of in-vehicle projections has a high overlap with the audience of home projectors, that is, the high-net-worth individuals who are willing to try new things.
Data from LotuTech shows that in the first three quarters of this year, the 500 yuan - 999 yuan and 5000 yuan + price segments in the Chinese smart projection market are the only two price segments that maintain growth, showing an obvious "K"-shaped consumption trend.
XGimi, which was originally positioned in the mid-to-high end, also began to adjust the product price range from last year, and intensively launched new products below 2000 yuan and above 5000 yuan. However, the products currently targeting the "dumbbell" positioning at both ends have not yet had a significant effect on XGimi's performance.
Then, to what extent can the in-vehicle projection positioned in the high-end market repair XGimi's performance? Recently, 36Kr had a conversation with Zhong Bo, the chairman of XGimi Technology, and Xiao Shi, the CEO. The following is the edited interview:
36Kr: Briefly introduce the process of XGimi's choice to enter the in-vehicle field? Which products has XGimi chosen to enter the market?
Zhong Bo: There are several main factors. First, the car is definitely the second home. With the increasing intelligence, the requirements for the comfort in the car are also getting higher, and there will be many parts that require optics. We see it as the demand for a large screen inside the car and the demand for digital light outside the car.
The ones that are most closely related to us and have the fastest market growth are the demand for a large screen inside the car and the demand for headlights outside the car.
36Kr: What is the form of the in-vehicle projection? Is there a big difference in hardware if the traditional projector is modified? What are the requirements for the vehicle-grade?
Xiao Shi: There are actually quite big challenges in the car. For example, the temperature range is wider, and the challenges of high and low temperatures are very great. But this is itself the basic requirement of the vehicle regulations, and we will naturally comply with these requirements when entering the vehicle.
What is the greater challenge? There is glass in the projection lens, and there may be some precision parts. After being exposed to strong light, even if it may have a deformation of one micron or one millimeter, the imaging quality will be affected, and the picture may not be clear.
The indoor temperature of the home is relatively constant, but it is different in the car. It may reach 40 degrees in summer and be very cold in winter. Therefore, the entire system must ensure that it can present a very high-quality picture to the user regardless of the low or high temperature. This challenge is much greater than that of the home use.
36Kr: Does the cost increase a lot as a result?
Xiao Shi: Yes, but maybe 70% to 80% is the same, and 20% to 30% is something dedicated to the vehicle. Because the materials used in the home are also some highly reliable materials. We have shipped approximately 7 million projectors in the home use field, and we have a large amount of historical data, which is also a good reference for us to enter the in-vehicle field.
It is also related to the billions of R&D expenses we invested in the previous few years, including the factory in Yibin. The first goal of this factory is to improve the quality, then the delivery, and finally the cost. It is not done just for the cost. To be honest, if it is really for the low cost, it is cheaper to outsource outside.
36Kr: The installation rate of HUD (Head-Up Display) in vehicles is increasing rapidly. In comparison, the demand certainty of in-vehicle projection is lower. Will XGimi's product layout focus be biased towards HUD?
Xiao Shi: HUD has not been invested in a large scale for the time being. Because the current solution for HUD uses the LCD solution, which is not the technical route that we mainly accumulate.
36Kr: The decline in the demand for home projectors in recent years has been very obvious. Then what is your judgment on the demand for in-vehicle projectors? I would like to hear your analysis.
Xiao Shi: There are many scenarios for in-vehicles, not just projectors, but they all use the technology of projectors, just applied to different scenarios.
We can discuss them separately. For example, the digitization of headlights, I think it is a trend. What the core of headlights does is the digitization of light. What benefits will it bring?
For example, in Europe, the European Union has a bill that says when meeting a car, the lights in the direction of the oncoming car should be turned off. But the original lights cannot be precisely turned off in the upper left corner, upper right corner or the middle. So the digitization of headlights is a relatively certain demand for Europe.
According to the prediction, the penetration rate of digital headlights in Europe will be 30% after five to eight years.
We believe that with the arrival of autonomous driving, the 360-degree lighting around the car is also a very big opportunity, but there is no accurate estimate for this, because after all, autonomous driving may still take some time.
But we believe that from the logic of the automotive robot, it needs to communicate and interact with the surrounding environment. From this point of view, it is a potential huge opportunity point.
From the inside of the car, we believe that in some vehicles with a larger space, the projector has its unique advantages for large-screen viewing. Our goal is to target the direction of large vehicles. Then there is also the creation of the interior atmosphere, and we are also exploring this with some leading vehicle manufacturers.
At present, the market of headlights is relatively more certain, and others are still in the exploration stage.
36Kr: If the target is high-end models, is it in line with the current trend of consumption downgrading?
Xiao Shi: Our perception may be a bit different. We believe that consumption is somewhat "K"-shaped, that is, the middle collapses, and the two ends are very hot. For example, large-sized vehicles such as Huawei M9 and BYD Denza are selling very well.
36Kr: In terms of projectors, from my personal observation, only families with young children need such entertainment devices in the back seat.
Xiao Shi: Our definition of this direction is based on the starting point of the "second home".
We observe our colleagues around us. Some of them have bought new energy vehicles and will work in the car or go to sleep at noon, just like treating the car as half a home. I agree that children like to watch projections, but now the car audio is getting better and better. The top-equipped cars even have more than forty speakers, and it is difficult to create such an audio effect at home.
Previously, the car audio solution has advanced rapidly, but the projection solution is relatively poor. So this year, we are collaborating with the vehicle manufacturers, hoping to bring the cinema effect to the car. Whether it is the image or the sound, it should be benchmarked against the best home theater. Because we believe that this enclosed space is the most likely independent space to achieve a high-quality home theater.
Moreover, because most homes are elevator apartments, the sound of the audio cannot be turned up too loudly, which will disturb the residents. People may think that the car screen is only about thirty inches, which is too small. But the distance is close enough, and the thirty inches may be equivalent to the effect of 150 inches at home. Therefore, with an image that almost covers the line of sight and a super-luxurious audio effect, a third space can be created.
36Kr: After the in-vehicle business matures, how much is it estimated to account for XGimi's overall revenue and how much driving effect will it have on the net profit?
Xiao Shi: This is difficult to judge, but our goal is to 再造一个极米.
36Kr: In the choice of opening up a new business, why didn't XGimi choose the AI track? Previously, I saw Samsung's Ballie projection robot, which seems to be a good direction.
Xiao Shi: This is a very good question, and it is actually a focus of our internal discussion, that is, whether we should be more boldly leapfrogging to enter the currently popular fields such as AI, or act based on our own advantages. Finally, after internal discussion, we reached an agreement that based on our accumulation and precipitation, we will expand in the direction of our advantages, rather than chasing the currently popular direction.
We have also seen Samsung's robot. I think its design is very creative and good, but after careful consideration, we believe that there are still many problems to be solved to truly apply it in life.
However, we will closely follow the development in this area. It may be that when the robot can enter the home on a large scale, the real application will be realized. So we judge that the time may be a bit earlier.
36Kr: Recently, many manufacturers at home and abroad are entering the AR glasses market. From the perspective of usage scenarios, smart glasses can replace projectors to some extent. How does XGimi view the convergence of AR glasses and projection in future application scenarios?
Xiao Shi: For this new technology, we are also closely following it. We have also purchased and used many of these glasses that can watch movies. But we believe that there is a problem with the scenario of this kind of glasses. It is to some extent relatively closed, at least the current technology is like this, and it will isolate the user from the surrounding environment to a certain extent. Just like Apple's experience is very good, but why doesn't it sell well? It is because it is isolated from the surrounding environment.
So I personally think that the more practical glasses may be AI glasses. Currently, the brands that have done a really good job in the actual experience of AI glasses may be the monochrome information prompt glasses launched by brands such as Rokid.
And for making color glasses that can achieve AR or the integration of virtual and real, I think the best one currently is Meta's Orion. It projects images in the air, and the surrounding environment can also be fully integrated, and the weight is not very heavy.
The reason why it is not sold is that the technology is not fully ready and the cost is extremely high. It is said to be as high as ten to twenty thousand yuan.
I also recognize the direction of glasses, but its basic technology still needs to make a breakthrough to a certain extent. Currently, I think the technologies that are ready are the microphone, speaker, and monochrome information prompt on the glasses. These three technologies combined may have a more innovative solution in the short term, or it is a solution that can actually enter everyone's life.
36Kr: In addition to entering the in-vehicle field, what other measures of increasing income and reducing expenditure is XGimi taking?
Xiao Shi: In the future, we may enter the commercial projector field.
At present, the commercial projector market is mainly dominated by Japanese manufacturers such as Epson, Sony, and Taiwanese manufacturers such as BenQ and Panasonic. After ten years of intensive R&D investment, we now find that XGimi also has the ability to produce high-brightness commercial machines, and the brightness can even reach tens of thousands of lumens. Therefore, we also plan to enter the commercial field next year.
With China's current strong manufacturing capacity, I think there are very few fields like the business projector that is still occupied by Japanese brands.
36Kr: Is the commercial scene mainly within the company?
Xiao Shi: One is the office. Although many offices are currently replaced by large-screen TVs, for example, some medium-sized meeting rooms require a 150-inch TV, but Micro LED looks too dazzling and often has many bad pixels. So we found that many medium-sized offices are using projectors.
In addition, there are universities. The lecture halls in universities will have projectors. For example, many MBA classrooms have projectors. This is the second scenario.
Third, now the country attaches great importance to the cultural and tourism direction, such as teamLab, which is a light and shadow art museum, as well as some government exhibitions. The demand in this direction is very large now, and we see that this market is still growing.
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