CHENGDU, China, Oct. 10, 2017 /PRNewswire/ -- In an exclusive interivew, Li Cheng, the CEO of Xcloud, an emerging startup company based in the Chungdu Tianfu Software Park, explains how he developed his business with the smart router product.
Chengdu Tianfu Software Park (the Park) is one of China's 11 national software industry bases, a national software export innovation base, and a national service outsourcing base urban demonstration park. Since officially beginning operations in 2005, the Park has attracted over 600 domestic and international tenants, including IBM, SAP, EMC, Philips, Maersk, Siemens, Ericsson, Dell, Wipro, DHL, PwC, NCS, Garmin, Huawei, Alibaba, Tencent, and Manulife Financial. Among these, 34 are Fortune Global 500 companies. The Park currently houses over 60,000 working staff.
Meanwhile, the Park is operating China's renowned startup incubation platform, Tianfu Software Park. Lab, as well as the largest national public technology support platform in western China, one of the most important industrial platforms in Chengdu and western China in order to offer innovative startup services to the mobile Internet sector.
In 2016, Xcloud was listed on National Equities Exchange and Quotations (NEEQ) or the "new third board" and the sales revenue of its smart router hit over 100 million yuan. Up to now, the sales volume of its major product "Newifi 3" has surpassed 100,000 units. Li Cheng, CEO of Xcloud, who made his fortune by hardware business, told our reporter that the DNA of Xcloud is in essence a software service company. This start-up focuses on private cloud and has shifted its attention to smart router market because it has seized the "golden key" to smart home market - "bandwidth sharing".
Bandwidth Sharing: A Router that Gives Red Envelopes
Since 2013, mobile internet has witnessed rapid development and the demand of network access, therefore, has experienced exponential growth. Gee router, TP Link, Netcore and other players of domestic smart router manufacturers have expanded their business dramatically. However, Li Cheng discovered some unavoidable shortcomings for routers available on the market: slow speed to download videos, disturbance of video display and system halts. If a stable, high-speed and high-performance smart router could be developed, this product must be a desired device for people.
Xcloud has begun to develop routers since 2013 and has launched "newifi 1", "newifi mini" and "newifi 2". The advantages and core competitiveness of Xcloud's routers do not lie in the routers but their added value: accelerating the pace of displaying video, video pre-buffer and pre-downloading. This explains why "newifi 3" wins great popularity.
As noted by Li Cheng, the smart router will serve as a foundation to realize bandwidth sharing, a mode similar with DIDI, by utilizing the Internet. He explained, by leveraging bandwidth sharing technology, namely, distributive CBN, bandwidth in idle can be collected and sold to video producers and live streaming providers; therefore, revenue can be generated through bandwidth sharing which can be returned to users. Users can receive envelopes ranging from a few dozen yuan to over a hundred yuan. Li Cheng mentioned: sharing economy, a type of cooperative consumption, will prevail in the future. We offer platform for pooling the power of the mass public and network sharing will be the first breakthrough for us.
Unique Vision: The Internet Catches On Again
Li Cheng's company applied to settle down in Tianfu Software Park in 2009 because of the various supportive policies for start-ups. In the process of entrepreneurship, Tianfu Software Park offered precise and practical supportive policies for Li Cheng's start-up so that he could feel reassured to develop his business in Chengdu. Xcloud encountered financing difficulty in November 2012. Tianfu Software Park took the initiative to ask for financing assistance from CDHT Investment and a total of two million yuan was raised, which facilitated the R&D efforts of Xcloud.
Following the release of "newifi 3" in October 2016, it soon championed the sales of smart routers and Xcloud realized break-even point. After Xcloud was listed on NEEQ, its sales reached new levels for three consecutive years. In 2015, the overall sales revenue of Xcloud registered over 30 million yuan. In 2016, the number was doubled to over 50 million yuan. In 2017, Li Cheng estimated that the sales revenue could amount to 150 million yuan.
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