(Yicai Global) Jan. 23 -- Mobvoi Inc., the first Chinese startup to receive investment from Google, has unveiled wireless earbuds, part of the firm's efforts to rival Apple Inc.'s AirPods in the smart headphones market.

The Beijing-based firm will sell the product, named TicPods Free, at a close-to-cost price of CNY499 (USD78), said Li Zhifei, Mobvoi's chief executive in an interview with Yicai Global on the sidelines of the GeekPark IF tech conference in Beijing on Jan. 19.

"The ability to successfully market a product depends on price and the scope of product promotions. Innovation alone can't guarantee success," Li said.

When speaking about the product's price, Li denied that Mobvoi's costs were lower than those of competitors. He drew on past experience, stating that the most decisive factor for the success of a new product is the breadth of the company's market reach. This was a key consideration for its close-to-cost price, part of the company's plans to penetrate the fast-growing smart headphones sector.

The smart headphone market will be worth more than USD40 billion by 2020, market research agency WiFore Consulting predicted in a recent report. Li estimates that wireless headphone sales are likely to hit 20 to 30 million units this year. He has set a sales target of 500,000 to 600,000 units for Mobvoi.

Li aims to impress consumers with the product's outstanding price-performance ratio and quality.

TicPods Free is more user-friendly than AirPods in terms of device control, volume adjustment and track-changing operations, Li insisted. AirPods are priced at CNY1,288 (USD 201) on Apple China's website, while the Chinese rival will be much cheaper.

Mobvoi adopted the undercutting strategy because unlike most other technology startups, "We have enough money, and this is one of our biggest advantages. We won't die (due to lack of funding)," he explained.

The firm has raised more than USD255 million via six funding rounds, the most recent of which was led by Volkswagen Group last April. The firm previously received investment from Google in October 2015.

Li admitted that he derived the inspiration for the product from Apple's AirPods, and that he started studying the wireless headphone market and user demographics after Apple's product was released, before starting research and development for TicPods Free in March or April 2017.

"Smart earbuds will trigger another boom in the field of voice interaction technology," he opined.

Mobvoi strives to chase the latest market trends such as smartwatches and smart speakers, as it looks to identify and experiment with voice interaction products that have the greatest market potential. The company takes into account various user scenarios for which these products can be used.

However, he admitted, product selection at his company was still informed largely by market trends. "The reality today is that no AI company can create a product, a smartwatch, for example, and then become popular enough to float its shares on the stock market. This is what makes technology development a cruel business. You must keep trying new stuff and keep improving what you already have at the same time."

Mobvoi has established a set of criteria for selecting new products: if the product is related to voice interaction; if fully-developed technology is available in the marketplace; and if Apple, Google or Amazon has provided basic-level consumer education for the product or similar. "We're a startup, and we face considerable uncertainty in R&D operations. The biggest benefit that we get from leading brands like Apple is that they can educate consumers on new products," Li added.

Device sales will remain the main source of revenues at the firm, he disclosed, but it "doesn't mean that we're just a device manufacturer, because our products are connected and interactive and offer software/AI features, meaning that we can develop different business models after we have acquired a substantial number of active users."

The firm sees TicPods Free as another entry point to access the voice interaction service market, just like all of its previous smart device products.

Above all, it must guarantee good user experience, he insisted. A product cannot be developed into a voice interaction device unless it possesses a high degree of user loyalty, without which voice interaction activity is meaningless.

Given the fact that Mobvoi first started as an algorithm and software developer, how can it ensure effective quality control across the supply chain after its transformation into a hardware company? In fact, the company has had difficulties in quality control operations during the development of its first smartwatch product, Li explained to Yicai Global and several other media organizations, because it only had six hardware engineers back then. The firm now has at least 100 hardware engineers, and most of them come from such well-established multinational corporations as Nokia.