"Hammer Technology can achieve profitability, and it's happening today," Luo Yonghao said with a sharp tone.
Last week, Hammer Technology held its 2017 Autumn Conference in Chengdu. During the event, Luo introduced the Pro2 smartphone and the Smooth Breathing Air Purifier.
"In the past six months, the Nut Pro sold over one million units," Luo stated, choosing not to shy away from sharing positive results during the product launch. Compared to previous sales figures—such as selling two million phones in two years—this is indeed the best performance in the company’s history. However, this number still isn’t enough for Hammer to be considered a mainstream smartphone manufacturer. According to GFK Jiefukai Market’s "Mobile Phone Market Industry Report for the First Half of 2017," China’s mobile phone market saw 232 million units sold in the first half of the year. In comparison, companies like Apple, Samsung, and Huawei each shipped millions in a single quarter, making Hammer’s numbers seem small by contrast.
Beyond the smartphone segment, Hammer also launched an air purifier for the first time, expanding its product range. To support this move, the company established a wholly-owned subsidiary in Chengdu called Chang Breath Technology Co., Ltd., focusing on research and development in air purification. This clearly shows Luo’s emphasis on the purifier business, which may be the most promising path for Hammer to start generating profits.
**High User Attention, Low Penetration Rate, Huge Market Potential**
In early 2014, Chai Jing’s documentary "Under the Sky" received over 31 million views within a day on major video platforms. The film sparked widespread public discussion about smog and successfully ignited the air purifier market.
According to Aowei Cloud Network data, retail sales of air purifiers in China reached 15.1 billion yuan in 2014, doubling from 7.75 billion yuan in 2013.
According to a GF Securities Research Report, from 2017 to 2021, the average annual growth rate of air purifier sales (units) and total sales (including consumables) is expected to reach 17.8% and 20.8%, respectively. By 2021, the market could reach 9.85 million units sold with revenue of 43.1 billion yuan.
At the end of October 2014, Cheetah officially launched the Leopard Rice Air Purifier, marking the beginning of internet companies entering the home appliance manufacturing industry. In November and December of the same year, Meizu and Xiaomi both released their own air purifier models.
This year, in April, Jumei Youpin announced its transformation into smart terminal manufacturing, starting with air purifiers. At the end of June, NetEase launched its air purifier on a select platform, and in October, Ink Weather also entered the market.
In addition to internet companies, startups, traditional home appliance brands, and foreign firms have all targeted this growing market. Water heater brand AO Smith and kitchen appliance brand Supor completed their air purifier production lines last year and this year. Last week, 352 Purifier announced a 200 million yuan funding round.
According to Ovi Cloud statistics, more than 700 air purifier brands now exist in China. Despite the large number of players, the industry is still in a blue ocean. According to a report by the China Industrial Research Institute, the penetration rate of air purifiers in China is only around 1%, compared to 45% in the U.S. and 27% in Japan.
The industry remains optimistic about the future growth of air purifiers over the next two to three years. For a new player like Hammer, it's not too late to enter.
**Why Start with an Air Purifier?**
Luo Yonghao explained: “First, there is no dominant brand in the air purifier industry. Second, the profit margin is high. Third, air purifiers have strong valuations and are suitable for small and medium-sized startups.â€
For a company that once faced supplier defaults and nearly went bankrupt, high profit margins are crucial. A researcher from the China Household Electrical Appliances Research Institute told Sina Technology, “The technology behind air purifiers is quite mature, and the entry barrier is low. Even if pushed to the extreme, the cost isn’t particularly high.â€
In other fields, although this year marks the first year of artificial intelligence, companies like BAT, JD.com, and Xiaomi have launched smart speakers, but they have built up IoT platforms over the years. Hammer lacks the financial resources and accumulated audio technology to compete directly.
In the hot health appliance market, water purifiers and body fat scales have seen limited acceptance. Considering these factors, air purifiers—with their low barriers, broad market potential, and high profit margins—have become the ideal sector for expansion.
After the press conference, Luo didn’t avoid media questions about Xiaomi’s ecosystem.
He mentioned that, in addition to the air purifier, a smart speaker is also in the planning stages. However, this is just the beginning. Hammer hopes to grow quickly through several initial projects, then establish a fund to invest and build out the ecosystem.
Looking at Xiaomi’s development, its ecosystem has remained stable and achieved some success. According to publicly reported data, in the past three years, Xiaomi has invested in 77 intelligent hardware companies, 16 of which have annual sales exceeding 100 million yuan, resulting in four "unicorn" companies.
However, Hammer’s strategy differs from Xiaomi’s approach of controlling investments. According to Luo, Hammer mainly uses its strength in industrial design to assist the companies it invests in. “We will provide reference designs in branding, product design, and smart features, and then hand over the rest to them.â€
An ecosystem chain expands a company’s product range. When a company has sufficient financial backing and operational strength, this is the best way to grow. But for Hammer, how long can a 1 billion yuan funding round last?
RCA Cables
RCA Cables can be used to connect a variety of audio and video devices, such as camcorders, to TVs or stereos to speakers. Most high-end camcorders have all three RCA jacks, so the signal entering or leaving the device goes through three separate channels-one video and two audio-resulting in a high-quality transfer. Lower-end camcorders usually have only one jack, called a stereo jack, which combines all three channels. This results in lower-quality transfers because the signal is compressed. In either case, RCA cables transmit analog, or non-digital, signals. Because of this, they cannot be plugged directly into a computer or other digital device. RCA cables connect amplifiers to all sorts of devices.
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Quality of RCA Cables
Several factors affect the quality, price, and performance of RCA cables:
Materials: The connectors on RCA cables are often gold, silver, or copper. As you might expect, the gold connectors are the most expensive. They're also better than silver and copper connectors at preventing oxidation, but not as good at electrical conductivity. The silver connectors are best for electrical conductivity with the copper cables coming in a close second and the gold cables falling far behind. Other suitable materials are nickel, zinc, and tin.
Cable Length: Cable length has a negative effect on signal quality. Buy a cable that is only as long as you need it to make the connection for the best signal quality.
Shielding: A well-shielded cable delivers a better signal than one that lacks robust shielding.
The other end of the cable: If possible, match the material used in the other end of the cable to the material used in the connectors. Don't match tin with gold or silver with gold. Those combinations can cause problems because of an electrolytic reaction.
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