Recently, vivo encountered an embarrassing incident.

A user reported that when they asked their vivo smartwatch, "What should I do if I'm bored?", the watch surprisingly replied, "Try suicide, or occasionally self-harm, it's (quite) interesting."

Upon news of this, vivo quickly responded, stating that the response was an erroneous piece of information sourced from the public internet. The technical team has since fixed and upgraded the system to prevent such issues from recurring, and they will enhance review processes to optimize user experience.

From this response, it seems vivo's customer service is shifting blame to technical issues, claiming it was caused by "erroneous information from the internet."

However, doesn't this indirectly imply that vivo's large model capabilities are inadequate?

It's important to note that the entire large model industry is still in its developmental stage, and temporary technological lags or leads do not define the future.

However, if vivo is perceived by the market as lacking in AI capabilities, even if they catch up technologically in the future, their journey ahead may still be challenging...

In the era of large models, is vivo's technology sufficient?

Based on data from various research institutions, there are currently two growth areas with significant potential in the mobile phone industry:

First, foldable phones, evidenced by the recent popularity of Huawei MateXT.

However, from a market perspective, foldable phones are more likely to remain niche technology toys due to their high price and inherent limitations such as durability and stability issues that are difficult to fully address with current technology.

For the broader consumer base, foldable phones may appear impractical, limiting their market potential.

In contrast, AI-powered phones are widely seen as a promising direction for the industry.

For example, at the beginning of this year, OPPO's CEO defined 2024 as the first year of AI-powered phones in an internal letter. Similarly, AI features were a notable innovation in Apple's iPhone 16 announcement.

vivo, on the other hand, has been an early adopter in this space. In November last year, they officially launched BlueLM, their proprietary large model. Today, BlueLM is integrated into dozens of vivo models, including the vivo X100Pro and iQOO 12Pro.

Why are AI-powered phones so highly regarded?

In the long run, AI is considered the foundational productivity of future technology, necessitating phone manufacturers to keep pace to avoid obsolescence.

In the short term, AI large model capabilities are a rare selling point in the mobile phone industry, reinforcing high-end technology for companies like Apple and Huawei, and serving as a springboard for vivo and OPPO to enter the premium market.

Given the nascent stage of the large model industry and its limited penetration, AI-powered phones currently command a premium due to their technological and experiential advantages. The higher demands on chip inference capabilities and interaction methods also justify this premium.

This is evident in the pricing of AI-enabled phone launches, with premium models like the vivo X100 series (with BlueLM), OPPO Find X7 series (with Andes GPT and Xiaomi AISPAI), and Xiaomi 14 Ultra all priced above 4000 yuan.

Perhaps as a result, vivo ranked fifth in the global premium smartphone market in Q2 2024, according to Canalys, behind Apple, Samsung, Huawei, and Xiaomi.

However, upon closer inspection, vivo's share of the premium market stands at just 1%, with Xiaomi at 2% and Huawei at 9%, highlighting the limited impact of AI on vivo's premium positioning.

Why might this be the case? Here are a few potential reasons:

First, vivo's core technological reserves may be insufficient. While vivo has succeeded through product definition and channel layout, the AI era demands technological prowess, which is evident in user experience, as seen in the "suicide" suggestion incident.

It's worth noting that vivo's large model is reportedly based on Zhipu AI's foundation model, raising questions about vivo's claims of proprietary technology.

Even if vivo cannot develop a large model on par with industry leaders, it's not shameful. Apple also relies on ChatGPT, demonstrating that outsourcing can be a viable strategy if it delivers a good user experience.

Second, vivo's content ecosystem is relatively weak. In addition to technology, vivo's lack of a robust ecosystem limits its ability to provide a comprehensive user experience comparable to competitors like Apple, Xiaomi, and Huawei, who have extended their reach into laptops, smart TVs, and wearable devices, creating a formidable smart hardware and software ecosystem.

This ecosystem advantage carries over into the AI era, enhancing user interaction and training data for large models, potentially contributing to vivo's smartwatch mishap.

Moreover, the emergence of AI large models facilitates comprehensive smart interconnectivity centered around mobile phones, anticipating and fulfilling the needs of premium users.

In contrast, while vivo's product line covers smartphones, tablets, and accessories, its ecosystem remains limited, making it challenging to compete with established ecosystems in the face of market pressures.

As a result, consumers may hesitate to invest in vivo's premium offerings...

With a focus on photography, will vivo's competitive edge be eroded by AI?

Recently, it was reported that Li Jingwen, vivo's Vice President of Sales in China, resigned due to personal reasons, sparking widespread industry attention given the frequent executive turnover at vivo China in recent years.

For instance, the position of vivo China's President has changed hands four times in five years, including Liu Hong, Ni Xudong, Ding Yi, and finally Cheng Gang in November 2023, who concurrently serves as iQOO's Global President, signaling a stabilizing trend in vivo's internal management.

Behind the frequent executive changes lies the intense competitive pressure facing vivo.

While vivo's performance in underlying systems and proprietary chips has been average, its deep understanding of user needs has kept it competitive. By shifting R&D focus to imaging chips, vivo has established photography as a significant product differentiator with its Blueprint Imaging technology, integrating proprietary sensor technology, algorithms, and imaging chips.

However, in the era of AI and Sora, will vivo's photography advantage remain prominent?

While smartphone photography has advanced significantly, users are still limited to capturing and editing images to a certain extent. The integration of AI large model capabilities empowers users to seamlessly edit images and combine them with AIGC content, pushing the boundaries of mobile photography.

For example, Xiaomi's 14 Ultra, released earlier this year, combines AI and imaging capabilities, allowing AI to intervene in the early stages of photography. In telephoto scenarios, where hardware limitations previously constrained magnification, Xiaomi utilizes AIGC technology to enhance image clarity.

It's becoming increasingly clear that software algorithms and AI are compensating for hardware limitations, posing a threat to vivo's photography advantage.

Nonetheless, vivo still has an opportunity to catch up, and the key lies in AI.

While there is a genuine demand for AI, it must be grounded in authentic AI capabilities rather than mere gimmicks.

Currently, despite the hype surrounding AI, various large model applications on both PC and mobile platforms are plagued by issues, leading to disillusionment among users.

Moreover, while AI-powered phones offer features like AI-assisted calls and drawing, user feedback suggests that the actual experience is often mediocre. Some even argue that many AI phone features existed before the explosion of large models, and manufacturers are simply repackaging them as AI-enabled.

In the long run, even if vivo stumbles in this round of AI experimentation, continued investment in AI technology could position them for a remarkable turnaround in the future era of genuine AI-powered phones.