In the past 2017, the domestic TV industry shuffled further. According to the "Summary Report on China's Color TV Market in the Third Quarter of 2017" released by AVC, the retail volume of the color TV market in the third quarter was 10.41 million units, a year-on-year decrease of 12.9%, making it the worst sales season in history. Among the major TV manufacturers, Changhong ’s net profit attributable to shareholders of listed companies in the first three quarters fell by 67.97% year-on-year, Hisense ’s net profit fell by 47.39% year-on-year, and Skyworth fell 85.90% year-on-year. Before LeTV's financial problems broke out in 2016, there was a relatively optimistic voice in the TV industry that LeTV's expansion of copyright, especially sports copyright, will enter a contraction period, and LeTV TV's market share without sports copyright protection will be sold to TV. industry. But as far as the current situation is concerned, LeTV Sports' acquisition of copyrights has been completely stopped. Recently, LeTV Sports CEO Lei Zhenjian has resigned, and LeTV TVs without copyright blessings have also experienced a significant decline in sales. However, even though LeTV has encountered serious problems, from the three quarterly reports of several TV giants, it seems that LeTV's market share has not been transferred to Changhong, Hisense, Skyworth and other manufacturers. So what happened in the TV industry, and who really became the vested interests of this round of reshuffle? LeTV, as a pioneer of Internet TV, advocates the "hardware free" theory, trying to make up for the cost of hardware through the content ecology. Nowadays, the entire process of replaying LeTV TV, aside from financial and other issues, its Internet TV theory has the following fatal flaws: First, the price of hardware is significantly affected by market fluctuations. In 2017, TV panel prices skyrocketed, and TV hardware costs increased. It was unrealistic to blindly subsidize hardware with content realization. Second, the cost of content copyright is high. According to a data at the end of 2016, LeTV holds the copyright of 310 sports events and broadcasts more than 16,000 games throughout the year, including MLB, NFL, Tour de France, and even the Pacific Federation of American University Sports. The financial cost is too high. In fact, LeTV's ecologicalization is actually based on extremely high costs. LeTV declined rapidly, and the Internet TV camp also suffered a round of blows. According to data from Aowei Cloud, the market share of Internet TV in 2017 decreased by 6 percentage points year-on-year to 13%. But in the specific operation, we also see that the Internet TV camp is still a big deal. For example, PPTV smashed 1.3 billion yuan to obtain the rights of the Chinese Super League. As of now, it has obtained more than 30 each including La Liga and Premier League. The copyright of the league is almost all popular games except NBA. Among them, the 1.3 billion yuan fee for the Super League is only 50 million yuan less than LeTV. On the one hand, panel prices are rising, and hardware costs are increased; on the other hand, the Internet TV camp has no signs of ending in copyright procurement, which naturally puts tremendous pressure on Internet TV manufacturers. Judging from the practices of some brands, there are probably the following practices in the industry for the above problems: One is to implement content output. For example, PPTV and Xiaomi jointly produce a customized version of the TV, which transfers the pressure of unilateral copyright procurement to similar enterprises and dilutes the procurement cost. However, considering that the entire industry is facing severe downward pressure, it is not known whether such behavior can completely offset the purchase cost. But one thing is almost clear. The hundreds of millions of copyrights bought not only enrich the content ecology, but also increase the pressure on the operation. The second is that Internet TV manufacturers cooperate with content parties at the capital level. Whether it's a micro-whale TV in cooperation with Ali, or a Skyworth brand under the deeper cooperation between iQiyi and Tencent Video, its intention is to borrow an Internet content platform and use capital cooperation to reduce procurement costs. As mentioned earlier, Internet TV is currently experiencing unprecedented pressure, and the downward pressure on the industry market is greater than that of traditional TV manufacturers. Up to now, although the industry is undergoing rounds of reflection and adjustment, to a certain extent, it still continues the thinking inertia of LeEco, that is, the relevant procurement of content copyright is still high. Without the support of hardware sales and premium behaviors such as membership, whether the high content costs can be digested in normal business behavior is the market's most concerned. Based on this, the author believes that the Internet TV bubble still exists. As the pioneer of Internet TV, LeTV was also the industry leader in its peak period, which also caused the entire industry to be overwhelmed by LeTV's inertial thinking. But the market may have warned the Internet TV industry that LeTV can no longer follow the old path. At the 2018 CES (International Consumer Electronics Show) exhibition, Chinese TV manufacturers are commendable in terms of hardware innovation: for example, Konka launched a 75-inch 8K TV, Changhong pushed a three-color laser theater, and Skyworth launched an independent research and development. AI picture quality chip, TCL launched quantum dot TV and so on. If Internet TV can also make frequent efforts in hardware research and development, and find a new balance in content storage and hardware investment, and at the same time give up relying solely on content to subsidize hardware and price wars, then it is possible to free up enough Energy and funds to build new industry barriers. From another perspective, it can also be seen that enterprises that have not burned large amounts of money on the content side may invest more in hardware research and development, and traditional manufacturers' technology and R & D advantages can be exerted here. But it also adds a hint of concern to the industry's future development: whether hardware and software can grow in a coordinated manner, such as Internet TV brands that spend billions of dollars on content construction, and whether they will have the opportunity to develop hardware Development. Previously, PPTV, a major sports copyright company, exhibited laser TV at CES, but we will still pay attention to its continuous investment in hardware. The future development trend of the smart TV industry is not completely clear, but there are basically two items that can be affirmed: First, content copyright is still king and copyright output is carried out, especially in sports events suitable for family viewing, this will be the development of the industry Absolute barriers; Second, we must strive for hardware technology, such as laser TV, 8K technology, etc., and this is also an opportunity for domestic traditional TV manufacturers. According to Ovi Cloud data, traditionally dominant Japanese and Korean TV manufacturers are in China. The market share is only 20%. If domestic manufacturers can achieve a full rise in hardware technology, it will become an important factor for balancing Japanese and Korean manufacturers. For domestic Internet TV brands, scale growth is gradually entering a bottleneck period, and the traditional member revenue model has gradually weakened the revenue. The industry has begun to try to expand revenue channels through advertising and e-commerce. The industry predicts that the share of Internet TV advertising in 2018 is expected to reach 6 billion yuan. Although the growth rate is obvious, due to too many industry brands, most companies will appear to be "unsatisfactory". Even large players, this share of advertising It is difficult to balance the cost of copyright procurement. The uneven development makes it easy to push the industry to the most basic principle of business: cash flow is king. In the process of smart TV development entering the "second half", LeTV was absent and hardware prices increased. This aspect put tremendous pressure on the industry, but on the other hand, when both hardware and content issues have been fundamentally resolved, The industry will accelerate the reshuffle, based on the principle that cash flow is king, whoever can hold it to the end will be the king.
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