Main points
Tracking the progress of meta watch products: according to the news of sunrise big data, meta is planning to launch its first smart watch. We expect it to be released at the Facebook connect conference in October 2022, and the second generation may be released in 2023.
Hardware configuration prediction of meta Watch: it is expected that meta watch will be equipped with cellular communication function, which can operate independently without relying on smart phones and meet privacy protection. We speculate that Qualcomm wear4100 may be adopted for SoC scheme. Due to the positioning of social intelligent hardware, meta watch will also be equipped with camera, and the screen can be rotated, flipped and disassembled to meet the functions of voice, photographing, video recording and social sharing. At the same time, we expect it may be combined with our own customized Facebook, instagram and WhatsApp social applications to explore more efficient social networking; Meta watches may also be equipped with health sensors to collect users' health information, which may have a synergistic effect on the core advertising business in the future; Meta watch can also interact with its own oculus VR hardware to realize video call, streaming media and other functions.
Meta watch software / ecological outlook:
1) operating system: it is expected that the first generation may directly adopt Android wear, but in 23 years, the second generation is expected to use customized RTOS system to realize exclusive content and ecological closed loop, and fully connect with oculusvr.
2) product positioning & content Ecology: the positioning of meta watches can be compared with that of little genius children's watches. The success of little genius watches depends on the precise positioning of social products that need to be met in closed scenes. The core competitiveness is the social system built based on children's social needs, and with the monopoly position in children's social field (8 million monthly live users), Little genius occupies one third of China's children's smart watch market and dominates the field of medium and high-end honeycomb children's watches in China. Meta watch selling price prediction and sales volume estimation: combined with the prediction of meta watch hardware configuration, we speculate that the BOM cost is about 1000 yuan, and oculus VR subsidy mode may be adopted to control the selling price within 400 US dollars; Referring to the monthly live data of little genius, in September 2020, the number of monthly live users was close to 8 million, corresponding to the sales of 9 million little genius children's watches, while the number of monthly live users of Facebook, instagram, WhatsApp and messenger under meta was close to 3 billion in April 2020, and it is close to monopoly in the field of overseas social applications (Europe, America and Asia). We believe that meta watches can grow into "great genius" in the future, The shipment volume is expected to reach 100 million or even more than one billion.
Investment advice
We believe that the continuous iteration of smart watch products will fully benefit the relevant targets of the smart watch industry chain. We recommend Bestechnic (Shanghai) Co.Ltd(688608) (the progress of smart watch SOC scheme is better than expected), and we recommend paying attention to Goertek Inc(002241) (meta core supplier and smart watch assembly OEM).
Risk tips
Product iteration is lower than expected, downstream demand is lower than expected, etc
