Author?|?Yetong
Editor?|?Xiao Han
On November 17, Beijing time, domestic Internet and AI giant Baidu officially released the The company's financial report for the third quarter ended September 30 (unaudited).
In the third quarter, Baidu's operating conditions further improved. Revenue was 28.2 billion yuan and net profit was approximately 13.7 billion yuan, both exceeding Wall Street expectations. Baidu's core business has become the main driving force for Baidu's revenue growth and has rebounded significantly. Baidu's core business revenue this quarter was 21.4 billion yuan.
At the same time, Baidu has reached an inflection point in its AI business. Among them, the strategic business Xiaodu Technology has completed independent financing, and the commercialization of hardware and software businesses has accelerated. In terms of intelligent cloud, in the third quarter, Baidu AI Cloud's revenue increased by 4.1 to 2.2 billion yuan year-on-year.
Apollo focuses on the three major areas of intelligent transportation, Internet of Vehicles, and autonomous driving, and is another focus of Baidu's AI strategy. So far in 2020, Baidu Apollo has achieved breakthrough achievements in technology and business exploration.
In terms of intelligent transportation, the “ACE Traffic Engine”, which was only released in April, has now been implemented in more than 10 cities. In terms of smart car connectivity, Baidu Apollo cooperates with more than 60 car companies and plans to cooperate with more than 400 models on the market. Intelligent transportation and intelligent connected car services already have monetization capabilities. In addition, in terms of autonomous driving, Baidu Apollo also leads the industry in technology and business exploration.
In Baidu’s Q3 financial analyst conference call, Baidu Chairman and CEO Robin Li also made a special introduction to Apollo’s positioning and business model.
In Robin Li's positioning, Apollo is a comprehensive solution for intelligent transportation and a dynamic ecosystem, including equipment manufacturers, government agencies, technology providers and large manufacturers. Deeply involved.
In terms of business model, Apollo has three directions. The first is to provide technology for OEMs and provide DuerOS system. The second is intelligent transportation infrastructure projects. The new intelligent transportation infrastructure project in Guangzhou Development Zone with a project value of 460 million falls into this category. Third, Baidu’s robotaxi can use Apollo’s L4 and L5 autonomous driving systems.
“This business (i.e., self-driving taxi business) has been launched in many cities in China. I believe that we can see the commercialization of this business in the near future.” Robin Li said in the financial report conference call .
In general, Baidu’s advertising and other core businesses have rebounded with the gradual recovery of the economy, and some AI businesses have achieved certain profitability. This provides Baidu with the opportunity to continue to adhere to the value of technology and promote new AI businesses. Good financial support. On the other hand, with new infrastructure, intelligent connected cars, vehicle-road collaboration and other trends coming to the fore, new AI businesses represented by Apollo are also expected to have the best time to release their value and become a new engine for Baidu's development. At the same time, we will promote the development of industry and society.
1. Revenue and profit exceeded Wall Street expectations? AI business has reached an inflection point
In the third quarter of 2020, Baidu’s revenue and net profit performance overall improved. The company's revenue was 28.232 billion yuan, a month-on-month increase of 8. Net profit was 13.678 billion yuan, compared with 3.579 billion yuan in the previous quarter, a month-on-month increase of 282%.
According to public reports, Baidu’s revenue and profits for this quarter exceeded Wall Street expectations, with net profit exceeding Wall Street’s average expectations by 56%. In addition to showing that Baidu's overall profitability has been improved, this also proves to a certain extent that Baidu's business and operations have strong anti-risk capabilities.
Baidu’s key financial data for Q3 2020
In terms of specific business sectors, Baidu’s core business rebounded significantly and became the main driving force for the company’s revenue growth. In the third quarter, Baidu’s core business revenue totaled 21.379 billion yuan, an increase of 13% month-on-month and 2% year-on-year.
Among them, online advertising revenue was 18.4 billion yuan, basically the same as last year; non-online advertising revenue increased by 1.4 to 2.9 billion yuan year-on-year, which was mainly driven by the growth of intelligent cloud business.
Baidu’s mobile ecological infrastructure, which is supported by Baijiahao, smart mini programs and hosted pages, continues to improve, prompting the recovery of Baidu’s advertising business, which is Baidu’s main source of revenue. Following this trend, Baidu's advertising business may achieve better performance in the fourth quarter of this year.
Key financial data of Baidu’s Q3 core business
In addition to the recovery of traditional business, Baidu’s new starting point for development-AI business has also ushered in an inflection point in development. Financial reports and recent data show that 2020 may be the year of commercialization disruption for Baidu’s AI business.
On the whole, we can divide Baidu’s AI business into Xiaodu Technology (covering software such as Xiaodu voice assistant and hardware devices such as Xiaodu smart speakers and Xiaodu smart displays), smart cloud, and Baidu Apollo. parts.
In the third quarter, the most significant event of Xiaodu Technology was its independent financing. After the financing is completed, Xiaodu Technology’s valuation has risen to about 20 billion yuan.
The outstanding performance behind the scenes is an important reason why Xiaodu Technology has gained the favor of capital. Baidu's third quarter financial report shows that in September, the number of monthly voice interactions with Xiaodu Assistant's first-party hardware devices reached 2.7 billion, an increase of 65% compared with the same period last year; the total number of monthly voice interactions with Xiaodu Assistant reached 5.3 billion. The number of developers of the Xiaodu Assistant Skill Store has reached 45,000.
In terms of intelligent cloud, driven by related businesses in the Internet, transportation, financial services and healthcare industries, Baidu AI Cloud's revenue has achieved steady growth, with a year-on-year increase of 4.1 to 2.2 billion yuan in the third quarter.
At the same time, Baidu Apollo also made breakthrough progress. When Baidu released its financial report, it specifically stated that "the commercialization of Baidu Apollo is gradually unfolding, and the development momentum in fields such as intelligent transportation and autonomous driving is particularly strong."
Specifically, in September this year, Baidu Apollo won domestic approval in Changsha. The first fully driverless test license. Obtaining this license means that Baidu Apollo has been allowed to remove safety personnel on open roads and conduct fully driverless road tests. In addition, Baidu Apollo successfully won the bid for the new intelligent transportation infrastructure project in Guangzhou Development Zone in August, with a project value of nearly 460 million yuan. It is likely to become the largest bidding project order in the domestic intelligent transportation field in 2020.
In general, Baidu delivered a good answer in the third quarter of 2020. While the advertising business is performing steadily, the AI ??business is also accelerating due to industry and policy favorable conditions. As various industries further deepen their intelligent upgrading and digital transformation, Baidu will also usher in more development opportunities in the future.
2. Are the three major businesses of Apollo developing simultaneously? The results are remarkable
Through the latest quarterly financial report, it can be seen that Baidu has achieved good results in both company operations and specific businesses. Among them, the recent progress of Baidu Apollo deserves special attention.
Apollo is a key part of Baidu's AI strategy and one of the two pillars of Baidu's AI new business. At present, Baidu Apollo's business layout focuses on three aspects: intelligent transportation, Internet of Vehicles, and autonomous driving. As of the third quarter of this year, Apollo has achieved important breakthroughs in its three core businesses.
1. The “ACE Traffic Engine” released in April has now been implemented in more than 10 cities
On April 9, Apollo officially released the “ACE Traffic Engine” and launched Apollo Intelligent Transportation Solutions made a disclosure.
"ACE Traffic Engine" is a set of underlying technologies created by Baidu Apollo for local governments covering AI, maps and other underlying technologies, intelligent engines such as autonomous driving and vehicle-road collaboration, as well as specific applications such as intelligent information control and intelligent public transportation. A complete intelligent transportation solution.
With the help of the "ACE Transportation Engine", local governments only need to put forward demands when deploying intelligent transportation projects and building intelligent transportation systems.
Similar to finding equipment, underlying technology suppliers, coordinating the cooperation of all parties, completing technology integration and other tasks, you can package it and leave it to Baidu to solve. To put it simply, this plan will be very efficient in execution.
In about half a year since its release, the "ACE Traffic Engine" has been put into practice in more than 10 cities including Beijing, Changsha, Chongqing, Baoding, Nanjing, Cangzhou, Guangzhou, and Dalian. In other words, from domestic first-tier and new first-tier cities to second- and third-tier cities, everyone has expressed their recognition of the “ACE Traffic Engine”.
2. More than 60 cooperative car companies have made rapid progress in the commercialization of smart car connectivity
Baidu began to lay out the full-stack research and development of "vehicle-road collaboration" in 2016. At the end of 2019, Apollo released the intelligent car connection open platform at the first ecological conference, officially integrating the "three dragon beads" of the autonomous driving open platform, the vehicle-road collaboration open platform, and the intelligent car connection open platform.
In terms of Internet of Vehicles, Apollo is at the forefront of the industry in terms of the number of car brands it cooperates with and the number of models it has launched. Up to now, Apollo has cooperated with more than 60 car companies in the Internet of Vehicles, including Mercedes-Benz, BMW, Ford, General Motors, Cadillac, Lexus, Geely, Great Wall, Chery, Hyundai, Kia, etc. There are more than 400 models on the market for cooperation.
At the same time, Xiaodu Car will also provide navigation services to more than 10 million users every day, and the number of voice interactions per month can reach 15 million times.
3. Self-driving taxi services open to the public have been launched in three cities
As mentioned in the financial report, this quarter, Baidu Apollo has made some progress in self-driving technology and business exploration. Important progress.
Removing safety guards is an important step in the large-scale implementation and profitability of self-driving taxis (robotaxi). From a technical perspective, Apollo obtained China's first fully driverless test license in September this year.
During the 2020 World Congress, Apollo successfully demonstrated autonomous driving and 5G parallel driving. Its autonomous driving technology strength is at the forefront of the industry.
Baidu Autonomous Taxi
In terms of business exploration, Baidu Apollo’s self-driving taxi has now fully opened trial services in Changsha, Cangzhou, and Beijing.
According to official data from Baidu, in Beijing, the peak call volume of self-driving taxis on the third day after they went online was 600, and the number of calls throughout the day exceeded 2,600. It is said to be a new player in Beijing. Internet celebrity” is not an exaggeration.
It is understood that among the three major businesses of Baidu Apollo, intelligent transportation and intelligent car-linkage businesses have the ability to be commercialized and can achieve "self-development". In contrast, it will take some time for self-driving taxis to be commercialized, but judging from the future market size, the prospects are quite promising.
According to research by JPMorgan Chase, from 2019 to 2025, China’s L1 to L5 assisted driving and autonomous driving market will achieve an average annual growth rate of 33%, and the market size will reach approximately 71% by 2025. billion US dollars (approximately RMB 46.4 billion). When the time comes, Baidu Apollo, which has fully accumulated experience in autonomous driving technology and business exploration, will naturally enter the "fast lane" of commercialization.
3. Is the trend of domestic intelligent network connection coming? Apollo has a bright future
Now, Apollo, one of the core pillars of Baidu’s AI new business, is facing unprecedented development opportunities.
Baidu's performance has recovered, its core business has begun to rebound, and some AI businesses have shown rapid growth. All these provide basic guarantees for Apollo to delve into intelligent transportation, Internet of Vehicles, and autonomous driving that require heavy R&D investment.
On the other hand, and more importantly, the general trend of domestic automobile intelligent development has arrived.
Today, intelligent connected cars and related industries are developing in full swing around the world, especially in China.
The capital market is often the most responsive to changes in trends.
Recently, the stock prices of automobile companies that have already laid out their plans in intelligence, such as Tesla, NIO, and Xpeng Motors, have collectively shown a rising trend. At the same time, capital has already begun to increase its investment in the autonomous driving track. Data shows that so far in 2020, the financing amount of global autonomous driving companies has exceeded US$7 billion (approximately RMB 45.8 billion), which has exceeded the financing scale in 2019.
Focusing on China, regarding where and how intelligent connected cars are going, after early exploration, the development goals and development routes have become relatively clear.
The recently released "Intelligent Connected Vehicle Technology Roadmap 2.0" plans that by 2025, my country's intelligent connected vehicles with L2 and L3 autonomous driving capabilities will account for 10% of total vehicle sales. 50, the C-V2X terminal new car assembly rate reaches 50, and highly autonomous vehicles have been commercialized in limited areas and specific scenarios.
In 2030, the proportion of L2 and L3 autonomous driving models in my country will reach 70%, the proportion of L4 autonomous driving models will reach 20%, and C-V2X terminal new car equipment will be basically popular. After 2035, L5 autonomous passenger cars will begin to be used.
Contents of "Intelligent Connected Vehicle Technology Roadmap 2.0"
"Intelligent Connected Vehicle Technology Roadmap 2.0" will provide an important reference for the formulation of relevant policies. In terms of development routes, the Ministry of Transport has issued the "Digital Transportation Development Plan Outline", which proposes to vigorously promote the research and development of autonomous driving and vehicle-road collaboration technologies, thus laying the foundation for domestic autonomous driving to adopt a single-vehicle intelligent vehicle-road collaboration route.
In addition, in the post-epidemic period, in order to promote the recovery of the domestic economy, the Central Economic Work Conference has repeatedly proposed to increase investment in new infrastructure. The intelligent transportation system with technologies and applications such as autonomous driving, vehicle-road collaboration, 5G, and AI as its core has become a hot spot in the industry.
At the key nodes of intelligent connected cars, autonomous driving, vehicle-road collaboration and new infrastructure construction, Baidu Apollo has focused on the three core areas of intelligent transportation, Internet of Vehicles and autonomous driving. It can be said that it has accurately grasped the pulse of the times.
More importantly, in these three major businesses, Apollo has an earlier layout, already has a rich reserve of technology and project experience, and has a first-mover advantage in the industry. Next, Apollo, which is at the forefront, is expected to release more value, continue to lead and even push the entire industry forward.
For Baidu, the rapid release of Apollo's potential energy and the arrival of a new development stage also mean that Apollo will become its own new development engine, driving further growth in the company's revenue and profits.
This article comes from the author of Autohome Chejiahao and does not represent the views and positions of Autohome.