In 2025, AI toys will explode!

In 2025, the AI trend will pay attention to the annual investment opportunities of AI device-side chips

In 25 years, AI models will become more powerful, AI Agents will revolutionize the way work is done, and AI companions will support daily life. With the accelerated implementation of device-side AI, end-side chips will become a new growth driver for the semiconductor industry and a new highlight for the whole year.

AI toys are in the stage of rising from 0 to 1, and as one of the important application scenarios of AIGC, the millet economy is more interactive with dolls, models, music boxes and other products after being connected to AI, attracting more consumers. AI toys are no longer limited to toys, they have various functions such as entertainment, learning, companionship, medical treatment, etc. AI toys can be seen as the easiest to land in a smaller version of Embodied Intelligence 3.0.

Byte emotion model No. 15-20 entered the grayscale test (multi-channel confirmation), which is good for companion applications, and the end side of the bean bag (AI companion toys, etc.) is the most direct benefit

AI accompanies investment logic combing

1. The scenarios and business models of traditional applications have been run through, and what AI does is to maximize the use of scenarios and release more business potential. In the U.S. stock market, AI education Duolingo, AI advertising Applovin, AI analysis and decision-making Palantir, AI e-commerce Shopify, etc., are all examples of AI transforming traditional application scenarios.
2. The value of AI companionship starts from the IP industry, transforming scenarios such as games, text/voice socialization, and two-dimensional online, and offline scenarios such as interactive devices such as toys/headphones, and amusement machines, and is expected to release greater commercial value. AI companionship has stronger user stickiness, and with the rise of AI multimodality, stickiness and willingness to pay may continue to increase.

Online: According to the data of SimilarWeb and Aurora Yuehu, the commonality of AI companion online products is that the user stickiness is very high, and the average usage time per capita is higher than that of other AI application products, among which the average daily usage time of Hoshino App has exceeded 100 minutes/day in 24 years, which is close to the level of short videos. With the upgrade to video, games and other forms in the future, it is expected to create more explosive, highly sticky, and high-willingness AI applications.

Offline: According to the media, the moving and talking lightning McQueen toys launched by the American toy company Sphero are priced at $299, and the second-hand market is currently being speculated to more than 10,000 yuan, and the same moving and talking "Star Wars" BB-8 toys sold about 800,000 in 2015.

3. Tencent Research Institute predicts that the AI companion market will reach 100 billion yuan in 2027, of which the largest market is virtual story characters, with a total scale of more than 40 billion yuan. According to market research firm Contrive Datum Insights, the global AI toy market is expected to be worth $35.11 billion by 2030.

ByteDance's Mid-Autumn Festival gift pack provides a plush toy "conspicuous bag" with built-in AI components that allow users to communicate with them with voice; Byte launched the AI headset "Ola Friend", which supports AI functions such as Q&A at any time, English sparring, travel guide, and emotional gas station based on the bean bag model. Previously, it was reported in the news that Apple was developing a "desktop robot" product form; Keying Investment Co., Ltd. naturally chose to launch the AI companion game "EVE" and so on.

A new new consumption track

The reason why AI companion terminals are optimistic about the core that can quickly penetrate is the point of "uselessness", which is also one of the factors for the explosion of Japanese LOVOT robots. The companion terminal has a high natural fault tolerance rate, and there is no need to always pay attention to the seriousness of the function like the functional terminal, nor does it need to carry out consumer education. Many people have misconceptions about AI toys, such as young age and specific functions, but AI toys are not exclusive to children, they are a new track that can cover all ages from children to adults to the elderly. It is not necessary to provide specific functions, and those emotional companion robots that can "care for humans and enrich the heart" may be more popular with consumers.

(1) A new consumption track; (2) Pure incremental logic in the field of consumer electronics; (3) product ceiling, emotional value >> functional value; (4) A larger market scale, easier application scenarios, higher market fault tolerance, and faster penetration speed. Different from the functional positioning of AI glasses, headphones, and smart homes, companion terminal products provide emotional value, suitable for all ages, and the difference in value empowerment directly determines the speed and fault tolerance rate of popularization and penetration. Adults can't say no to a stuffed animal that interacts with you, or a robot cat that chats with you, or a well-known IP character that comes to life, let alone a child.

AI companion toys: At present, the secondary market focuses on children's products priced at about 399 yuan (the essence is speaker + plush toys + large model + character IP), and the current sales volume is more than 100,000 units. However, the actual product can also cover adults (companionship, healing, etc.) and the elderly (companionship and wellness care). Products for adults, such as Lovot (priced at more than 20,000 yuan), moflin (about 3,000 yuan), Ropet and Mirumi at CES, have received high attention on social media.

Tracking of AI Companion Toys:

1. Whether young children can make product differentiation or combine channel advantages to form explosive models, and the tracking of adult products focuses on relying on the advantages of the domestic supply chain, and the price of large-scale mass production is close to the people.
2. The progress of model capabilities, and the iteration of the accompanying model of domestic manufacturers are worth looking forward to.

Focus on: Espressif Technology, Quectel, Broadcom Integration, and Runxin Technology

Runxin Technology is the board, Espressif is the WiFi MCU, and Quectel is the cellular

As the product with the strongest C-end companionship (an average of 4 hours per day in internal testing), AI toys (including but not limited to plush toys, figures, and various objects) are extremely important strategic directions within Byte, and the strategic goal is to sell more than 10 million units next year. The supply chain has recently seen a significant increase in orders (the recovery of the Internet of Things industry), production capacity is very tight, and some ZJ projects are also queuing up to wait for the supply chain capacity to be released to ensure that it will be listed in March.

After a period of internal testing, the Doubao team found that the AI toys connected to Doubao have an excellent interactive experience for children aged 3-7 years old, and the daily connection time of a single customer is as long as 3-4 hours, and strong stickiness will bring strong repurchases; In addition, next year, Qianchuan (Toutiao traffic department) will invest a lot of resources in Douyin promotion, and the promotion effect will be stronger in the future.

Poor expectations: Doubao has selected three exclusive manufacturers to cooperate with - Runxin Technology, Quectel Communications and Espressif Technology. This AI toy, the main purpose of Byte is to promote the bean bag user group to break the circle, and profit is not the focus of their attention. Therefore, in the supply chain, Byte intends to support two exclusive chip module factories (Quectel and Espressif) and a hardware solution platform (Runxin Technology) that has in-depth cooperation, and changed the supply model into a complete machine supply model, and the profit of a single machine has skyrocketed from the previous 10-20 yuan to 150

Quectel updates

1. ByteDance's emotional model No. 15-20 has entered the grayscale test (multi-channel confirmation), which is good for companion applications, and AI toys are the most direct beneficial
2. The official public account released the AI toy solution for cooperative bean bags; Today, he also responded to the rumors of the previous byte cooperation on the interactive platform
3. In addition to providing communication modules, the company is also developing toy solutions and supplying complete machines (the prototype has been completed), which is expected to be put on sale in March
4. The company's recent order volume has increased significantly (the recovery of the Internet of Things industry), the production capacity is very tight, and some ZJ projects are also queuing up to wait for the company's production capacity to be released
5. The company and Runxin Technology are both authorized partners of bean bags, and they can share the profit from the sales of preset Tokens of toys (the profit of a single toy token package is about 10-15 yuan; If the subsequent call volume is large, the user's recharge part can also bring profit-sharing)
6. The company is actively looking for sales channels for docking IP manufacturers, and the self-produced and self-sold IP model can further improve the profit of a single machine, and the highest single profit can exceed 100 yuan (299 pricing - 40 yuan hardware cost - 50 yuan sales fee - 40 yuan IP cost - 20 yuan bean bag call cost)
7. Today's interactive easy also mentioned that the company is also developing intelligent modules, controller products and related vision technologies for robots

Broadcom Integration Updates:

1. Broadcom Integration is a leading manufacturer of Wi-Fi MCUs in the world, and has quickly entered the AI toy industry. In January 25, the company joined hands with Aldoubi to launch an AI toy kit that integrates the large model of the volcano engine bean bag. The toy is equipped with Broadcom BK7252N and BK7258 ultra-low-power audio and video chips to realize real-time voice model interaction on the device side.
2. AI toys have the characteristics of good interactive experience, multiple use scenarios, few hardware restrictions and low Alification costs, and are expected to become the fastest large-scale AI end-side applications. CDI predicts that the potential market for AI toys will exceed [40 billion] US dollars, and Wi-Fi MCUs are expected to benefit deeply. Al toys generally call the cloud model, the toy networking function has become a rigid demand, Wi-Fi has become the first choice for cloud migration with high speed and low cost, and considering the demand for computing power, Wi-Fi MCU is the main product form
3. Elastic calculation: the market space is 40 billion US dollars, the chip accounts for 5% of the cost, and the market is 2 billion US dollars, and the company as a global core manufacturer cuts 10% of the share, 200 million US dollars, 1.5 billion yuan of revenue, compared with the company's 6-700 million revenue.