The Three Phases of Cheetah Mobile

Cheetah Mobile, founded in 2010, has undergone a remarkable transformation across multiple technological waves, from the era of personal computing to the burgeoning age of mobile internet and now, artificial intelligence (AI). The company's journey has not been linear, marked by rapid advancements, significant setbacks, and constant evolutionAs Cheetah Mobile seeks to capitalize on its past experiences while delving into AI and service robotics, the critical question remains: can it leverage its historical strengths while also securing a robust position in the rapidly developing AI market?

In its early days, during the PC boom, Cheetah Mobile predominantly focused on distributing KISSME (a popular Antivirus), successfully using Cheetah Browser for ad revenueThis business model paralleled that of its rival, Qihoo 360, reflecting a common approach seen during the competitive landscape of the time

Growth was swift, yet competition was fierce, prompting Cheetah Mobile to pivot significantly with the rise of mobile internet platforms.

Transitioning into the mobile internet age, Cheetah Mobile adopted an aggressive advertising strategy, joining affiliate networks to promote its suite of mobile utilities, including Clean MasterThe aim was twofold: enhance user experience through essential tools and profit from promoting third-party applicationsBy 2016, the company reported 651 million monthly active users, with significant revenue contributions coming from mobile advertising, particularly from its international ventures.

However, with every ascent comes a fall, and the company's overreliance on major partners like Facebook and Google proved riskyA report indicated that 25-30% of its advertising revenue originated from Facebook, while over 20% came from Google

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When Facebook abruptly terminated its partnership with Cheetah Mobile in December 2018, it marked a turning point, leading to a sharp revenue decline in overseas markets.

Following the fallout, a series of events throughout 2020 saw Google remove numerous Cheetah Mobile applications from its store due to advertising compliance issuesConsequently, revenues from their mobile utility product plunged, with the company facing substantial financial strain as it navigated these challenges.

The history of Cheetah Mobile encapsulates an overarching narrative: a company swift in market insight yet lacking resilience in strategic planningHaving often adhered to a rapid execution model, it struggled to establish a stable foundation for research and development, which is critical for sustainable growth and innovation

Not surprisingly, this approach led to troublesome ramifications.

In a contrasting narrative within the same industry, ByteDance, the parent company of TikTok, exemplifies a company that has significantly thrived through innovation and an acute understanding of content consumption, a stark contrast to Cheetah Mobile's trajectoryBack in 2015, when Cheetah Mobile was riding high with its product suite, the short video platform, Musical.ly, emerged as an exciting investment optionCheetah Mobile's CEO, Fu Sheng, grasped the importance of tapping into the short video trend—yet, buried in tool-based product thinking, they failed to pivot to a content-driven model that would allow them to seize this emerging opportunity.

In 2017, as ByteDance acquired Musical.ly and developed it into a global sensation, Cheetah Mobile opted for a stack of cash in exchange for its shares, essentially removing itself from potential future gains

Despite enjoying lucrative partnerships that yielded significant returns in its earlier years, the company's reluctance to completely reinvent its identity led to loss of market relevance.

That said, it is not all doom and gloomIn recognizing the need to adapt, Fu Sheng, in 2016, laid the groundwork for a strategic pivot, establishing Orion Star Technology with the ambitious goal of going "All in AI." This marked the beginning of Cheetah Mobile's transformation into a more technology-driven organization, focusing on service robotics and AI applications.

Fast forward to December 2023, Cheetah Mobile significantly increased its investment in Orion Star, acquiring over 72% ownership to command control of the companyThis strategic move signals Cheetah Mobile's serious commitment to the AI landscape it once confined itself from entering.

However, the path forward has not been without strategic turbulence

In the aftermath of its prior shifts, Cheetah Mobile faces considerable revenue impact as shifts from traditional internet advertising to AI-focused endeavors yield an initial cash drainDespite a pronounced shift toward AI solutions, the foundational revenue streams continue to be reliant on their advertising model—a precarious balance to maintain.

The integration of AI technology into its robotics projects initiated a new chapter for Cheetah MobileTheir robots, designed for functionality in complex environments, aim to address some of the vital market gaps identified earlier within its service offeringsThey are being developed with features such as voice interaction and visual connectivity to adapt to a variety of business applications.

Notably, Cheetah Mobile collaborated with major companies to deploy AI-enhanced solutions, seeing marked success in sales numbers, evidencing the potential for AI applications in real-world settings

A partnership with Shuanghui led to deploying service robots in over a thousand supermarkets, resulting in a reported increase in sales of new products by four to eight times dailySuch operational successes add to a narrative underscoring the market demand for intelligent service robotics.

Furthermore, their services have gained traction internationally, especially in regions experiencing labor shortagesBut despite the initial barriers such as language capabilities hindering deployment, advancements in AI model technology provide solutions to facilitate broader deployment of their robotics abroad.

In a candid vision statement, Fu Sheng shared their ongoing commitment to unlocking the potential of AI for the company, aiming to solidify its position as a global leader in service robotics