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Baidu (BIDU) Shows Hardware Prowess with Raven HQR

Baidu, Inc. BIDU raised the curtains on Raven series AI-powered hardware at the 2017 Baidu World yesterday. Raven H is the company’s AI-based smart home assistant that is due for a wider rollout in China in December.

The device has been developed in collaboration with Swedish consumer electronics manufacturer, Teenage Engineering and is powered by Baidu’s own DuerOS platform. Danish audio systems maker, Tymphany is in charge of providing the high-end audio components.

The Chinese tech giant also unveiled raven R, an automated six-axis robot and claimed that it possesses emotional intelligence. Its Raven Q is a concept AI Home Robot still under development. The company plans to implement technologies like simultaneous localization and mapping (SLAM), voice recognition and natural language processing, and computer vision to raven Q going forward.

The three launches are part of Baidu’s “All in on AI” strategy aimed at ramping up its artificial intelligence efforts. We observe that Baidu shares have rallied an impressive 45.6% year to date, significantly outperforming the industry’s 24.6% surge.

What’s New in Raven H?

There’s not much information except the fact that the design is unique. It is not like other smart speakers that have that have an orthodox cylindrical structure. 

Baidu, Inc. Net Income (TTM)

Rather, the palm-sized gadget looks a lot like eight colorful (red, blue, green and orange) plastic squares stacked above one another. The top-most square becomes a forward-facing LCD screen when tilted upward. It can be also detached completely and used as a touch-sensitive remote or a portable microphone.

The gadget costs $256 (1699 yuan), considerably higher than competing products like Alphabet’s GOOGL Google Home, Alibaba’s BABA Tmall Genie, JD’s Dingdong or any of the Echo variants from Amazon AMZN.

It seems that Baidu is not at all interested in price competition despite its late entry in a market that’s already has several branded smart speakers. In fact, at the moment, it’s difficult to say what’s actually the selling point or functionality that gives it an edge over rival products.

That’s because, at the launch, Cheng Lyu, General Manager of Baidu’s Intelligent Hardware Unit, spent very few words on the product’s functions and spoke more on design and hardware. There is no information on international launch plans.

Third-Party Contracts Coming in Quickly

This is important when it comes to smart speakers as third-party contracts not only help penetrate potential business areas but also attract more customers.

Baidu collaborated with InterContinental Hotels Group IHG to install Raven H in 100 rooms at its Beijing Sanlitun hotel.

The company also partnered with interior design platform to offer patrons home décor solutions.

Zacks Rank and Other Key Picks

Baidu carries a Zacks Rank 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other stocks worth considering in the broader technology sector include Activision Blizzard, ATVI, Applied Materials AMAT and Alibaba BABA, each carrying the same Zacks Rank as Baidu.

Long-term earnings per share growth rate for Activision, Applied Materials and Alibaba is projected to be 13.8%, 17.1% and 30.7%, respectively.

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