(Chinese Version)

Editor’s Note:

After reviewing TMTpost’s predictions about China’s TMT Industry in 2014, we have, after months of discussion and selection among our colleagues in Business Value’s newsroom, come up with another twelve predictions for 2015. Our aim is definitely not to foretell the future, but rather to give our readers some insights into the possible changes and trends in TMT industry.

Our predictions are as follows: 1. BAT (Baidu, Alibaba and Tencent) will cash in smart phone industry；2. WeChat will go backstage and degenerate into an ordinary social networking platform；3. New regulations on private equity crowdfunding；4. New regulations are to raise the entry criteria for new P2P companies；5. The music industry will be fully protected by copyright laws；6. First prize game winner will be awarded over ten million dollars； 7. Mobile game blockbusters will become mainstream in the market; 8. 2015 will be the year of FCVs and Tesla will no longer champion the market；9. Structural change in TV series industry；10. A new company in hardware industry with a market value of a billion dollars；11. Douban will be acquired; 12. Apple will stop producing new iPads

It’s always hard to be able to think out of the box and make wild but still reasonable predictions. Even though one may successfully predict the general trend, he or she still fails to figure out the specific details. To read more reviews and predictions, please go to our exclusive coverage: Annual Reviews and Predictions

One has to figure out the possible movements or changes of BAT and government policies before making any speculation. After a long period of random development, the mobile Internet industry is re-centralizing again, as can be seen from the following three aspects:

1. Government Regulation

Back in 2014, government had already played a role in the development of Internet finance and TV Boxes. So in 2015, we can safely predict that the role of government will be only more important in the development of films, P2P, and private equity crowdfunding industries, etc.

2. Matthew Effect

As Internet giants such as BAT continued to penetrate TMT industry, these giants will have a larger say in such industries as smart phones, smart hardware, mobile games and social networking.

3. What’s More?

Will government regulation, combined with BAT’s huge impact, bring about even more changes in TMT industry? Please refer to our analysis on digital music and e-sports.

Following are the twelve predictions about China’s TMT industry in 2015. This article first appeared on the January issue of Business Value and is further edited by TMTpost before reposted online.

No.1: BAT will cash in smart phone industry

On December 25th, 2014, Qihoo 360 and Coolpad surprised everyone when they joined to establish a smart phone venture company. All Internet giants have been eyeing smart phone business for a long time, since smart phones are not only intermediators between users and the Internet, but also platforms for various operating systems, apps, services and especially smart controllers.

The collaboration between Internet giants and smart phone manufacturers, however, is not something new. As early as 2011, Alibaba and K-Touch once teamed up to make Ali Cloud Phones. Moreover, Qihoo 360 also had half-baked collaboration with Huawei to make smart phones. On one hand, Internet giants are well aware of the importance of phones as an access to their services, on the other, smart phone manufacturers are attracted to Internet giants’ capital, software, contents and services. Yet, all previous collaborations had failed since no party was ready for their cooperation and their interests were not connected to each other.

Tencent should be the one that struggles most. Although the company has already had teams working on this area for almost a year, no product has been released so far, because Ma Huateng is not satisfied with their progress. For sure, Tencent will finally develop their own smart phone products, but there is an alternative: Internet giants could either make strategic investment or establish venture companies with smart phone manufacturers, as is exemplified in the collaboration of Qihoo 360 and Coolpad.

Qihoo 360 seems to be the most motivated Internet company to enter the smart phone sector. Confronting all kinds of challenges, Qihoo 360 attempts to acquire Meizu and OnePlus to fight back, which helps Qihoo go ahead of BAT in entering the smart phone industry. Alibaba has also been making a few moves in the mobile phone sector, such as developing K-Touch and investing in Meizu, but it hasn’t combined its interests with its partners. Instead, Alibaba always dreams to develop its own Cloud OS service, rather than phones. So it’s a pity that Alibaba still fails to connect with its users directly.

Similar to Alibaba, Baidu is also busy beta-testing Baidu Cloud, instead of phones.

Don’t forget about JD. As JD is still on the rise as an online retailer, no smart phone manufacturer dares to refuse to cooperate with JD. In this sense, JD could become a potential strategic investor in the smart phone industry thanks to its influence as an online retailer. But if JD cashed in smart phone industry, will Tencent be motivated to participate, form alliance with Ali and Baidu and integrate their interests together? If so, they would become the most potent smart phone manufacture in China. At present, however, no party is willing to take the initiative, though everyone is eyeing on this market.

Internet companies in China are all connected to each other and when one company takes the initiative, other companies will follow suit and participate, as can be seen previously in groupon and video business. In this sense, Qihoo 360’s new move may serve as a stimulus and encourage all parties to cooperate and make strategic investment in the smart phone industry.

When we look at the other side of the story, we may find that smart phone manufacturers are also badly in need of investment and more importantly, resources. We can now conclude that only those who are most resourceful can attract smart phone manufacturers to forge alliance.

No.2: WeChat will go backstage and degenerate into an ordinary social networking platform

While Facebook connects more than half of the world together, WeChat have connected most mobile Internet users together in China. On the one hand, both of them have become as popular as telecom and telephone used to be, on the other hand, young people begin to feel tired of them and seek for alternatives. In 2014, both Facebook and WeChat have focused on eliminating competitors through adding new functions and acquisition, as well as making profits out of the huge amount of users.

At the beginning of 2014, Facebook acquired Whatsapp with 19 billion dollars, along with 450 million active users per day, which greatly helped it play a part on the mobile phones market. However, Facebook’s dwelled on no success. Despite huge controversy, Facebook split with Whatsapp and carried out Facebook Messenger App. Zuckerberg insisted on splitting Facebook Messenger App from Whatsapp regardless of 14 consecutive one-star reviews on App Store and Google Play. Zuckerberg’s “stubbornness” proved right as the number of Facebook Messenger App users hit 500 million on November 10th, 2014.

WeChat, however, has no rival in China’s IM market, since Tencent has always been the dominant service provider. There is one exception though - Tencent QQ. WeChat and QQ, though both are Tencent’s products, are also competing for resources and dominance. In this process, they become similar. WeChat attempted to renew users’ attraction to it by including video service and developing a new six-second micro video function in WeChat 6.0. But after a short period, nobody bothers to use the video function any more. That is to say, it’s insensible for WeChat to include video service in the already too complicated and comprehensive WeChat.

Only a month later, however, WeChat carried out WeChat Phone Book App, following Facebook’s step to split Whatsapp and formed Messenger. However, WeChat is fundamentally based on mobile phones and there is no need for WeChat to make up for anything. The real challenge for WeChat is to help users who prefer phone calls become more accustomed to WeChat. In this case, WeChat Phone Book is no big deal for WeChat, as is also put by Ma Huateng, CEO of Tencent.

When Facebook and WeChat become so popular that they have already replaced phone calls and transformed into today’s telecom tools, printing a person’s Facebook Page or WeChat QR code on the introduction page of a company or name card of a person has become the everyday norm. People maintain old friends instead of exploring new friends on them and no surprise is to be expected.

Momo, however, is doing the opposite, as can be seen in its various slogans, such as “I am a part of the strangers” and “Do you really want to live without new acquaintances?” and TV commercials such as “A Bowl of Hot Dry Noodles” and “The Ballon Runner”. All these commercials and slogans are among Momo’s efforts to demonstrate to its potential investors that Momo is not a platform to hook up with others, but rather “to discover, chat and engage with new people and communities”.

Momo, with merely 180 million registered users and 60 million active users, is the third largest mobile social networking platform in China. Although Momo still lags far behind QQ and WeChat, it has no rival in Location Based Service (LBS) providers in China. While WeChat friends circle is overrun by endless selfies, Momo provides users with a gate to strangers and some fresh air. Gradually, users get accustomed to Momo’s service and no longer treat Momo as merely a platform to hook up.

While hobby-centered online groups appeal much more to literature and arts fans and nerds, location-based Momo is more favorable among young people who have no special interest. With the help of Momo, they get to play billiards, mahjong, and go to karaoke with people around and know lesbians, gays, and fellow villagers around them and even ask for help.

While WeChat reshapes the way people contact with each other based on phone books, Momo steps forward and connects strangers together, which is exactly what a O2O social networking platform really entails. While WeChat connects old acquaintances, Momo explores new acquaintances. Imagine the great possibilities out there.

Even curriculum apps would identify themselves as social networking applications in 2014.

Social networking platforms that use photo and video sharing as entry points have been popular in the United States for a couple of years, but they are still a new thing for Chinese people. Such kind of social networking soared in 2014 and even more forms were created, including social networking through updates, bulletins, sports, reading, news, habits, etc. People of the same hobby got to get together and formed their own circle.

While WeChat and Facebook aims to create a virtual friend circle based on phone books, and Momo seeks to connect strangers based on their location, the large variety of other social networking platforms attempt to go beyond hobbies and location and reshape the way people connect with each other. For example, while fashion insiders get to connect with each other through tags, users that are not fans of any specific stars mingle on Same and create a room of themselves. While football fans get to give quick comments while watching football games on Football Watch, users with obsessive-compulsive disorder will help each other form habits on Habit Forging apps, and gossip girls will share new rumors about their colleagues on applications such as Secret and No Secret.

All these applications are arousing users’ attention from WeChat. People’s time get more and more distracted and fragmented by these apps and furthermore, their social network also breaks into pieces. They don’t have to add likes or comments to friends’ updates and get trapped up in their old acquaintances. Instead, every new photo, update will become opportunities for new acquaintances, friendship, and even romantic relationships.

The vast variety of social networking platforms will free people from their old acquaintances and open a vast sea of possibilities for them. We predict that in the future, people will begin with knowing strangers through all kinds of social networking platforms and then have further conversation and interact with each other on WeChat.

No.3: New regulations on private equity crowdfunding

At present, the Contract Law of People’s Republic of China is already under adjustment to better regulate donation-based and profit-based crowdfunding behavior in China. The new law will make a distinction between donation-based, profit-based crowdfunding and equity crowdfunding, since the scale of the former two kinds of crowdfunding is far smaller than the latter one. At present, profit-based crowdfunding basically focuses on new and smart products and a healthy and well-organized market is expected to emerge soon. At the same time, however, donation-based crowdfunding may face great challenges since now appropriate credit evaluation system is in place to examine donors’ credit.

Private equity crowdfunding will be the focus of future regulation, since such behavior generally involves a large amount of capital and higher risk. With the economy foundering, the Chinese government, however, is willing to allow private equity crowding industry to develop so as to boost the economy, as can be seen in China’s premier Li Keqiang’s speech on a standing meeting of the State Council: the government will start to set up pilot programs for equity crowdfunding, encourage Internet finance companies to provide services to micro companies and agriculture, and establish a crowdfunding platform for micro-lending.

Chinese government is in support of private equity crowdfunding and is quick to come up with rules to regulate this industry. Previously, companies have to pay back the money by a certain time. With the help of private equity crowdfunding, more medium and small-sized companies get to raise enough funds for its business at lower costs.

Private equity crowdfunding will be the focus of future regulation. The new rule is based on the Draft Regulations on Private Equity Crowdfunding and will set specific standards for crowdfunding registration, entry, issuing and scale, etc. However, the public is amazed at the high standards set up by the Draft Regulation and are pessimistic about the future of Internet finance.

We might expect that China Securities Regulatory Commission (CSRC) will respond to public concerns and lower the standards, such as those about the minimum volume of a crowdfunding project and the minimum income of the borrower. However, no significant change is to be expected, because:

Above all, it is less risky to only permit those rich in experience, money and expertise to participate in crowdfunding activities.

Moreover, the Chinese government wishes to include traditional finance institutions in equity crowdfunding activities, as can be seen in the Draft Regulation. These institutions are after all more professional in conducting crowdfunding businesses, but are still not willing to take part in this still immature market right now. The main concern of the Chinese government is to help medium and small-sized enterprises and boost the economy, not to help crowdfunding companies make profits. That’s why restrictions on private equity crowdfunding are not expected to loosen any soon.

It is not likely that regulations on public and private equity crowdfunding will be carried out simultaneously, since the Chinese government has never issued two regulations on similar industries. So we predict that private equity crowdfunding will remain an opportunity for high-level businesses, while it remains to see when public equity crowdfunding will come on the table.

No.4: New regulations are to raise the entry criteria for new P2P companies

Internet finance industry is boosting in China. Let’s first take a look at P2P from the aspect of traditional micro-lenders.

United Asia Finance Limited (UAF), founded by Zhang Binghuang, Father of Hong Kong’s Micro-lending, is the largest foreign micro-lender in mainland China. In 2007, UAF expanded its business to Shenzhen when Shenzhen was named as one of the trial spots of micro-lending. Later on, UAF was permitted to carry out micro-lending business in Liaoning province after its governor went to Hong Kong to seek for investors. At present, UAF has already established over 130 outlets in 15 provinces and municipalities in China.

Mr. Zhang is frank about the competition from P2P companies. He summarized the advantages of P2P companies into three aspects: firstly, P2P companies do not need to get the permission to carry out its business; secondly, P2P companies don’t need to worry about the registered capital; thirdly, P2P companies are not affected by interest rates. Traditional micro-lenders, however, have to get a certificate, establish a separate company with high registered capital before carrying out businesses in a city. Moreover, they are supposed to report to banks, Finance Office of China and set their interest rate at no higher than 400%.

Imagine the challenges from P2P companies to traditional micro-lenders. That’s why UAF decided to cooperate with Dianrong.com so as to carry out businesses in provinces and cities that are hard to enter before while avoiding getting a certificate and registered capital.

There are two kinds of innovation in Internet finance industry: one lies in regulation, and the other lies in data. In the early development period of P2P lending, one can set up a micro-lending website with no registered capital, no certificate and merely several thousand RMB.

Previously, people generally expect only four pieces of regulation on P2P lending: P2P companies should not set up capital pools, only serve as a mediator, not tender guarantee or absorb funds from illegal sources, and finally can operate without certificates.

This expectation led to the boost of Internet finance industry in the latter half of 2014. However, no regulation was carried out in 2014. According to an insider, restrictions on P2P companies were to be carried out in 2015, in which registered capital will be a must to start up a micro-lending company, which suggests that no companies shall be able to make profits with the lack of regulations.

In terms of innovation in data, P2P companies make full use of Internet and choose to match investors with the borrowers. More importantly, with the help of new technologies, P2P companies get to better manage risks and lower costs at the same time.

The core of innovation in Internet finance industry lies in risk management. While banks are able to evaluate a borrower’s credit by referring to his/her credit history in banks, Internet companies such as Alibaba, Tencent and JD, are also able to evaluate its borrower based on his/her purchase history. We predict that more and more giants will enter Internet finance industry and more cooperation between traditional micro-lenders and Internet micro-lenders is to be expected.

However, it remains to be seen how P2P companies will deal with bad debts and manage risks with the help of new technologies. Due to the large amount of bad debts, it could be too risky to invest in or even acquire P2P companies.

When setting our thinking in a larger picture, we may find that the future of P2P companies is not all bright, since the steel and real estate industry, P2P micro-lender’s major market previously, is foundering and investors tend to be attracted to stock market due to the ongoing bull market. 2015 will be a year of changes for P2P online micro-lenders. Those small-scale, regional companies that have a better understanding of the market may, nevertheless, stand out.

No.5: The music industry will be fully protected by copyright laws

On July 1, 2013, QQ Music announced that it had reached an agreement with all major record companies and was going to charge users for downloading music items. However, QQ Music’s plan was delayed since music platforms at that time were not united. Yet, in 2013, Alibaba acquired Xiami.com, TTPOD, and Duomi Music, a subsidiary brand of A8 music, and bought Jing.fm in 2014. As Internet giants entered this market, QQ Music’s plan was put on the table again.

Later on, Ocean Music began to acquire music copyrights at a low price. QQ Music followed Ocean Music and acquired a large number of music copyrights. In 2014, QQ Music signed contracts with Warner, Sony and became their official distribution partner in mainland China. At that time, QQ Music had already acquired the copyrights of more than 8 million music items.

Similar to what happened a few years ago in the video industry, the music industry is also gradually monopolized and reshaped by several Internet giants in China as people become more and more aware of copyrights of music items.

On November 24, 2014, QQ Music accused NETEASE Music of violating the copyrights of 623 pieces of music owned by QQ Music. On November 27, Universal Music Group also warned TTPOD, NETEASE Music and Xiami that they have violated its copyrights. When the music industry is gradually getting monopolized by capitals, smaller music platforms will be forced to shut down.

In 2015, the music industry will be further protected by copyright laws, which is undoubtedly good news for recording companies, but not necessarily for users, since we might expect that soon every piece of music will be charged.

No.6: E-sport winners will be awarded over ten million dollars

In 2004, Meng Yang won the first prize of the Great Wall DOOM3 Championship and was awarded merely 1 million RMB. After a decade, however, the winner of League of Legends Season 4 World Championship will be awarded 1 million dollars and the overall prize pool hit 2.13 million dollars. Moreover, the winner of DOTA2 Tournament Ti4 will be rewarded as much as 4.73 million dollars and the overprize pool will be 10 million dollars.

At present, there are over 9.8 million DOTA2 players and 67 million LOL players actively playing the game every month around the world. Undoubtedly, DOTA2 and LOL are also the two most popular and lucrative computer games in China.

According to Finance Report of Tencent in recent three years, Tencent’s total income in 2012 reached 43.89 billion RMB, among which 22.849 billion RMB came from the online gaming sector. In 2013, Tencent earned a total of 60.437 billion RMB and 31.96 billion RMB in the online gaming sector. In the first half of 2014, Tencent already earned 38.46 billion RMB in total and 21.468 billion RMB in the online gaming sector. No wonder, gaming sector has already become the main source of the company’s income. As early as 2009, Tencent had already invested in Roit, the producer of LOL. In 2011, Tencent further acquired Roit with cash and equity deals. LOL will help Tencent make great profits in China and enter the global gaming industry and seek for opportunities.

After a decade of controversy, video games are finally legalized in China. Recently, Xbox One and PS4 officially entered China’s market after a series of checks and examinations, which is good news for both manufacturers and game developers. It is expected that venture capital will cash in and further boost the development of video game industry. Moreover, even China’s central and local governments entered this industry and held a series of game events. Sports Information Center of the General Administration of Sports of China just held NEST 2014 in Kunshan and set up four e-sport events, including FIFAOL3, StarCraft2, LOL and DOTA2 with 1 million RMB in total for the winners. Yinchuan city government also launched a national e-sport event called WCA in 2014 and funded as much as 20 million RMB in total to award the winners.

With the increasing support from game giants and loosening of government policies, the prize pool constantly breaks new records. In 2014, DOTA2 Tournament Ti4 crowdfunded over 10 million RMB in its prize pool. Imagine the great popularity of e-sports. It is expected, however, that the prize pool of e-sports will continue to soar due to the increasing number of players and popularity of e-sports.

UEFA awards 4.5 million dollars to 1/4 round winners of Champions League, and the gold prize winner of Wimbledon Championships Men/Women’s Singles games is awarded 1.76 million pounds. Guangzhou Evergrande Taobao Football Club was awarded a total of 18 million RMB after thirty rounds of games in 2014. We predict that the first 10 million dollars winner will be seen in 2015.

No.7: Mobile game blockbusters will become the mainstream in the market

According to D.cn’s statistics in November, 2014, the total launch performance ratio of role-playing games (RPG) reached 56%, among which In-time RPG took up 38% and Round RPG took up 18%. For sure, RPG has surpassed card games and become the most popular mobile game genre in China. Consequently, mobile blockbusters, featuring longer online gaming time, stronger user engagement, and higher affordability, will be the prevalent trend of future mobile games.

Although mobile blockbusters are the prevalent trend, there remains high risks in this industry. Card game Dotachuanqi succeeded in 2014 and a series of replicates emerged on the market soon. However, copying may not work in 2015. The mobile game industry in 2015 will become more diversified, as can be seen in the success of two distinct shooting games, Airplane Fight and Thunder Fighter. Although they are both shooting game genre, these two games have completely different game structures and they have different target audiences.

After years of experiences, game players are able to tell good games from poorly developed ones and surely they now have higher expectation for games. Thus, mobile game developers are working to develop more sophisticated mobile games.

It follows that competition in particular fields will become fiercer, since no players will play games that rank third and even lower on the leaderboard. Blockbusters feature high investment, high revenue and also high risks. At present, nobody will doubt the profitability of mobile game industry. This industry is now overflowing with capitals, talented developers and products. Even hardware manufacturers begin to cash in and develop, not surprisingly, role-playing mobile games. Role-playing games are more likely to become the blockbusters for players.

On the contrary, medium and low-focused games are most popular among overseas mobile game players. While RPG developers can utilize the vast amount of games and develop new games through improving and adjusting existing games, medium and low-focused game developers have no games to copy from and have to start from scratch. More importantly, RPG genre is at present better received by game players and game developers are also much more familiar with gamers’ habits and preferences.

No wonder, competition among blockbusters with great investments is most intense since no game giants dare to lose in this market, and those small-size game developers and startups have no room in this industry.

Let’s have a look at the history of RPG on PCs: from 2004 to 2008, numerous game developers sprang up, among them only a few succeeded; since 2006, no small game developers can survive in this industry. At present, only five games survive and are known by the large crowd of gamers, including Fantasy Westward Journey and Demi-Gods and Semi-Devils. Developers of other games are only left to envy these five games.

In 2014, a lot of success stories came from blockbuster developers. Yet, in 2015, only those giant game developers will survive and make profits.

No.8: 2015 will be the year of FCVs and Tesla will no longer champion the market

Elon Musk, CEO of Tesla Motors, has always regarded fuel cells as “fool cells” and argued that fuel cells were not environmentally friendly at all and cars powered by fuel cells would also emit greenhouse gases. Moreover, hydrogen is hard to preserve and easy to explode, so it takes a lot of money to build a hydrogen station with appropriate safety check. The high cost of building hydrogen stations is one of the major reasons why mass-manufacturing cars powered by fuel cells is difficult.

However, James Lentz, CEO of Toyota Motor Corporation North America Region, responded: “Were I Musk, I would also speak ill words of fuel cells since he has bet everything on electronic cars.” Nevertheless, Toyota just released its fuel cells-powered “Mirai” on December 15, 2014. Mirai can run as far as 650 km after being fuled by hydrogen for only three minutes.

The competition between Electronic Vehicle (EV) and Fuel Cell Vehicle (FCV) has a long history. While EVs are cheap in terms of charging but have shorter mileage, FCVs’ mileage is quite impressive but are more expensive because it takes a lot of money to build hydrogen stations.

After years of experiments, Toyota finally succeeds in reducing the cost of building a fuel cell-powered car, which could cost over a million dollars previously. Mirai is sold at 57,500 dollars in the United States. Moreover, Mirai owners will receive as much as 13,000 dollars government subsidies and free hydrogen from Toyota for three years, since gas cost is still too high for car owners at present. In the future, Toyota will gradually build more and more hydrogen stations in Japan and the United States.

For the time being, there are around 280,000 EVs in the United States. According to the Third Quarter Finance Report of Tesla Motors, released in November 2014, it is expected that Tesla Motors will manufacture around 350,000 EVs in 2014 fiscal year and sell 330,000 cars, an increase of 50% compared to 2013fiscal year, but still 5% to 7% lower than previous expectations.

In the near future, Toyota aims to sell 4 million EVs annually in Japan. That is to say, there is still a long way before Toyota can overrun Tesla. The upcoming Model X and more affordable Model 3 will further help Tesla increase its market share. For Toyota, however, encouraged by the success of hybrid-powered Prius, it aims to repeat Prius’ success and sell more than 7 million Mirais.

Besides Toyota, all major car manufacturers are eyeing on this market and developing their own fuel cell-powered EV models. While Hyundai has already released ix35 fuel cell, Volkswagen also just unveiled three fuel cell-powered car models. At the same time, Daimler AG, Fort and Renault S.A. have got together and seek to develop a fuel cell-powered EV and put it on the market as early as 2017, while Ford and Honda also formed an alliance to co-develop fuel cell technologies.

Tesla championed the EV market in 2014. Its success put great pressure on other traditional car manufactures. That’s why all major car manufactures are releasing their own EV models and FCV models (they dare not to lose either market), so as to compete with Tesla. 2015 will be the year of FCVs. Faced with the competition from traditional car manufacturers and their FCVs, Musk and his Tesla has no other option but to act and develop new and more affordable EV models. Tesla may be the leading EV manufacturer around the world, but it’s not alone, since all major car manufacturers also look for a share of the market.

No.9: Structural change in TV series industry

“One TV series, two satellite TVs” policy will be carried out on January 1, 2015. In 2015, a TV series can appear in prime time on no more than two satellite TVs and a TV stations can play no more than two episodes per night. Thus, TV series companies will have to raise purchase price so as to recoup the cost, since they cannot sell their new series to several satellites like before.

Seemingly, this new policy will not affect first-tier satellite TV stations like Hunan, Zhejiang and Jiangsu stations because nevertheless they can afford to buy TV series of good quality and big scale, or even monopolize and play exclusively the TV series. A case in point is Zheng Xiaolong’s new series The Legend of Miyue, starring Sun Li.

Yet, second and third-tier satellite stations will suffer. Previously, these stations could jointly purchase TV series (to lower the cost) when “One TV series, four satellite TVs” policy was still in place. After the new policy was carried out, however, these stations won’t be able to play quality TV series along with first-tier stations. For TV series companies, this new policy will also force them to produce more high-class TV series since no stations will buy TV series of poor quality any more.

Therefore, big TV series companies will be forced to produce more refined TV series while smaller companies will be driven out of the market. 2015 will be a year of changes for the TV series industry. New government policy will make big companies stronger and drive smaller companies out of the market.

No.10: A new hardware company with a market value of a billion dollars

2014 witnessed fierce competition between different wearable devices manufacturers.

While Google Glass begins to open its API to developers and appeal more to ordinary users instead of hardcore geeks, Apple also launched Apple Watch in September 2014 and releases it into the market in 2015. In October, Motorola unveiled its own smart watch MOTO 360 and Microsoft soon followed up and released its own smart bracelet.

Both Microsoft’s Health platform and HealthKit in IOS 8 have opened the great potential of wearable devices market. The combined efforts of Apple, Microsoft, Nike, Samsung and Intel have helped wearable devices market develop and expand rapidly.

According to Gartner, the shipment volume of wearable devices will hit 68.10 million dollars in 2015 and 91 million in 2016. Recent report reveals that the market volume of mobile health applications will reach 130 billion dollars in 2015 and the total sales volume will register 290 billion dollars. With an annual increase of 40%, the shipment volume of wearable devices will hit 150 million by 2020.

Provided the huge potential market, wearable devices industry is bound to grow explosively in the coming five years, especially in China. Wearable devices market will provide middle-end smart phone manufacturers with new opportunities to make profits by collaborating with health and medical apps. In this process, those hardware developers who are decisive and dedicated enough will surely stand out.

In September 2014, after receiving over 100 million dollars of investment, Jawbone’s market value hit 3.3 billion dollars. In early December 2014, Huami Science’s market value also hit 300 million dollars after raising 35 million dollars in the second round of financing. The popularity of wearable devices will spread towards router, air purifier and other smart hardware markets and further boost the development of the Internet of Things.

No.11: Douban will be acquired

In 2015, Douban will not only celebrate its 10th anniversary, but also seek opportunities to become commercially successful.

At the end of 2014, an article appeared on Douban and aroused heated discussion among the public. In this article, the author analyzed the key factors that were blocking Douban’s development, such as poor advertising performance, decreasing users, and slow apps, etc. As one of Douban’s users, the author still anticipated Douban to survive throughout time at the very end of his article.

In 2006, Douban received an overall amount of 2 million dollars from Ce Yuan Ventures during it's A round financing. In 2009, Douban received another 10 million dollars from Trustbridge Partners and Ce Yuan Ventures during its B round financing. In September 2011, Douban received 50 million dollars from Trustbridge Partners, Sequoia Capital and Bertelsmann Asia Investments during its C round financing. Up till now, how much money does Douban have? Has Douban become a white elephant for investors after raising more than 60 million dollars but still fails to turn commercial success?

On the welcome page of Douban App 1.0, Douban defined itself as “a platform of over 100 million users, 18 million film, book and music items, and 300 million piece of comments and ratings”. In the past decade, Douban has successfully established itself as an encyclopedia-style information platform, but still failed to make profits out of its huge users pool.

On one hand, Douban refuses to make profits through advertising, since in for its founder Bo Yang, his team and the users alike, Douban is incompatible with advertisements. On the other hand, Douban failed to optimize its user resources. Although Douban has tried to develop new services such as Douban Alpha and Douban Things, both efforts ended up in failure. Douban App seems to have successfully connected users via items, but still can’t find a way to make profits out of its services or advertisements.

In fact, Douban already lost the chances to become commercially successful ever since Sina Weibo was launched. Although Douban has survived this decade and had more than 100 million registered users, it will no longer match itself to Weibo and WeChat in terms of future impact, since it is defined basically as a platform of books, films and music items. This definition suggests that only a minority of population will continue to use Douban. Yet, only those who win the large majority can win in China’s Internet market. That’s unfortunately the rule of the game in this business world.

It is already a miracle for a company with no definite business models and plans to survive for a decade. Douban fails to live up to the expectation of its investors and has already been left behind amid the mobile Internet wave. Moreover, it has lost the golden opportunity to become listed on the stock market and remain attracted for investors.

To wrap up, Douban will have to rely on an Internet giant and survive with its hundreds of millions of items. Possibly, Douban will find new opportunities to thrive again. The harsh decision for Bo Yang to make is whether Alibaba or MI is Douban willing to rely on without irritating its users so much.

No.12: Apple will stop producing new iPads

Apple held two new products promotion conferences in 2014. One in September, when Apple unveiled its large screen smart phone models, iPhone 6 and iPhone 6 Plus along with Apple Watch, Apple Pay and IOS 8. The other in October, when Apple released iPad Air 2, iPad mini 3, iMac with a retina display, Mac mini and IOS 8.1.

These two conferences are completely different, since the first one released three highly anticipated products, iPhone6/6+, Apple Watch and Apple Pay, while the latter one only released a series of upgraded products, such as iPad series. There lied no significant improvement in these upgraded products, except for better hardware.

The day after Apple released iPhone 6, Apple removed iPod Classic, the only iPod player that adopts click wheel from Apple Store. The limited stock of iPod Classic on Apple Store and Best Buy were soon snapped up by Apple fans.

According to Apple’s Finance Report of the 4th Quarter in 2014, released on October, Apple earned 5.316 billion dollars from iPad, a decrease of 14% compared to 6.186 billion dollars in 2013. Apple sold 12.316 million iPads in the 4th quarter, a decrease of 13% from 12.079 million in the 4th quarter of 2013. The sales volume of iPad would have decreased for three consecutive quarters. At the same time, iPod’s revenue decreased by 28%. That is to say, iPad and iPod have become the only two products that registered decrease in sales volume.

The overall scenario is, Apple would have been losing share in the tablet market for three consecutive years. According to Garnter, the market share of Apple has dropped from 52.5% in 2012 to 27.5% in 2014 due to the challenge from cheap Android tablets and big screen smart phones. While the new iPhone 6/6+ will further take over iPad’s market, new versions of iPad fail to include more exciting functions and innovations to attract consumers.

Steve Jobs once believed that 3.5-inch was the best size for a smart phone and developed 9.7-inch iPad to make up. After Cook came to power, he has changed iPhone’s screen size for three times, and the user experience of the latest 5.5-inch iPhone 6 Plus is no different from the 7.9-inch iPad mini 3.

In this case, iPad is left in a quite awkward position, since it looks no different from a big screen smart phone. Our prediction is that iPad will follow the step of iPod Classic and pale into insignificance.

（The article is published and edited with authorization from Business Value, please note source and hyperlink when reproduce.）