Baidu Ventures into Smartphone Business: Xiaodu to Launch New Phone

Baidu China’s Key Search Engine, Launching its Smartphone

Baidu, the Chinese search engine giant, is set to launch a new smartphone through its subsidiary Xiaodu. The official launch is scheduled to take place next week at Baidu’s headquarters in Beijing. While the company has not revealed any details about the forthcoming product, sources speculate that the move could be aimed at enhancing Xiaodu’s ecosystem of hardware devices.

Xiaodu is known for developing a range of smart devices, including an Alexa-style smart speaker that is powered by Baidu’s own DuerOS system, as well as earphones, tablets, and televisions. The unit was valued at $5.1 billion after closing its series B funding round in 2021.

However, the smartphone market in China has been shrinking, with smartphone sales declining by 14% year-over-year in 2022, reaching the lowest level in a decade. The COVID-19 pandemic and subsequent lockdown measures have had a significant impact on the market, making it challenging for companies to sell their products.

Despite this, Baidu is optimistic about its new venture. While the company does not break down sales from Xiaodu in its financial reports, it relies on advertising for more than half its revenues. Last year, Baidu’s revenue dropped by 1% to $18 billion.

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The move into the smartphone market comes as Baidu continues to diversify its offerings. Earlier this year, the company launched a ChatGPT-style product called Ernie Bot. The launch initially caused the company’s shares to drop, but they later rebounded as analysts gave the product favorable reviews.

Baidu’s entry into the smartphone market could be a significant development for the company, as it continues to explore new opportunities and expand its offerings. With the launch of its new smartphone, Baidu is hoping to carve out a place for itself in a crowded and highly competitive market, and establish itself as a major player in the Chinese tech industry.

Forbes Staff

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