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CyberLink Spin-Off Perfect Corp.

Churning out World-Class Apps


Churning out World-Class Apps


CyberLink, the world’s leading multimedia software developer with notable products such as PowerDVD and PowerDirector, is staking a claim in the mobile Internet market.



Churning out World-Class Apps

By Sandy Lo
From CommonWealth Magazine (vol. 590 )

Industry insiders often lament that "Taiwan has missed the mobile Internet age." The reason for this exasperation is the fact that Taiwan lacks an app industry deserving the name because it has not created any globally successful products. However, it looks as if the dry spell has come to an end, allowing the island's mobile app developer community to hold its head high.

YouCam Makeup, a virtual makeup app developed by Cyber Link spin-off Perfect Corp., has made it into the league of global hit apps with more than 100 million downloads in 17 months. Behind this success is the technological prowess and entrepreneurial flexibility of an established old-school technology firm that has embraced the challenges of the mobile Internet.

CyberLink is the world's leading multimedia software development firm. It counts among its products the video playback software PowerDVD and Media Suite, a bundle of multimedia editing, management and burning tools. CyberLink has a global market share of 95 percent for pre-installed DVD playback software.

However, since nowadays fewer personal computers come with built-in DVD drives, and many users watch movies online by streaming or downloading them, CyberLink has seen its revenue shrink for two years in a row despite its dominant market position. Given that the personal computer market is hardly growing anymore, CyberLink was forced to develop new business opportunities.

"CyberLink has been around for 19 years now. In the beginning, no one believed that Taiwanese software could make it in the global setting. Yet the personal computer sector will not post big growth again; the sector is currently migrating to the mobile Internet. Over the past five years, Taiwan has been markedly absent from this new sector, so we need to at least plant a flag on it [to claim a piece of that sector]," notes Perfect Corp. CEO Alice Chang.

App Identifies Facial Features

Chang joined CyberLink as CEO in 1997, shortly after the company's founding, and helped built it into a software powerhouse. This time she has rolled up her sleeves once again to start building a company from scratch.

Two and a half years ago, Chang put together an app developer team within CyberLink. The unit was spun off as an independent company named Perfect Corp. last June. CyberLink invested US$30 million (about NT$1 billion) and committed a 100-member team, underlining its resolve to stake a claim in the app industry.

Perfect's signature app, YouCam Makeup, an advanced selfie editing tool, was released in August of 2014. Marketed as a smart cosmetics kit, it allows users to apply lipstick, eye shadow, blush and other decorative makeup for a real-time virtual makeover. The "magic mirror" function, which was added in a later release, uses facial mapping technology to identify facial features when the smartphone is in camera mode. It is no longer necessary to first snap a selfie. Such simultaneous use of video and photography features is technologically quite demanding.

"The more difficult something is, the more you can move users. We need to give users an unprecedented experience, or else we won't be able to create the value they desire," remarks Chang. YouCam Makeup is not just an app but a "beauty platform" that also comes as full-fledged PC software.

Chang recalls how development targets were set for the app early in 2015. They aimed for 50 million downloads via GooglePlay by the end of 2015 and more than 100 million downloads by mid-2016. Back then, no one actually believed that these targets were achievable. Much to everyone's surprise, the first target was reached two months ahead of time, while the second was met half a year early. In contrast, Pic Collage, the first app developed in Taiwan to break the 100-million-download mark, needed four years to get there. Of all Taiwan's home-grown apps, YouCam Makeup has reached 100 million downloads in the shortest time.

Merging the Real and the Virtual

Crucial for Perfect's success was the extensive technical expertise that it inherited from CyberLink. The YouCam Makeup app, for instance, is able to catch more than twice as many "identification points" to model facial features than comparable rival products. Moreover, the company has created a whole set of apps and services around beauty and style that are mutually complementary. Already Perfect is collaborating with more than a dozen cosmetics brands.

Maggie Ko, general manager of I Wink Co. Ltd., the Taiwanese distributor of Chinese rival beauty app developer Xiamen Meitu Technology Co. Ltd., openly admits: "YouCam Makeup has its special features. Particularly in that they are already working with cosmetics brands. In the future, Meitu's MakeupPlus [photo makeup tool] app will also develop in that direction," Ko says.

Moreover, Perfect is clearly aware that it must play the entire global software market. Its strategy resembles the CyberLink approach – quickly expanding across the whole spectrum of multimedia and teaming up with local brands in mutually reinforcing relationships. Presently, the YouCam Makeup market share per world region is as follows: North America 11%, Western Europe 11%, Central and South America 15%, Asia 17%.

One would assume that it would be quite easy for a computer software company to branch out into mobile app development. Chang, however, shakes her head and sighs as she recalls how tough the transformation was. "All changes are brought about by the tempo. The release cycle for new versions has shortened from one year to one week. That means 52 times as many changes. Only if the tempo can be moderated just right, can the whole thing be kept moving," she says.

Former CyberLink manager Hsiao Teng-yuan, who now serves as senior manager in Perfect's R&D Department, observes that product designers must also adjust their way of thinking. "There is an enormous number of app users, often more than ten times as many as PC software users. But app users will use their apps in only one or two contexts. That's why we need to pay particular attention to the user experience," Hsiao says.

Is Perfect the result of CyberLink's transformation? "Perfect is a new business model that CyberLink incubated. The two sides are already taking different paths; it is like two brothers climbing a mountain each doing his best," remarks Chang, who is not willing to define Perfect as a CyberLink transformation but rather hopes to position her company as a brand-new mobile software firm.

Meanwhile, Perfect's other apps – YouCam Perfect, YouCam Nails and Beauty Circle – have already been downloaded 60 million times worldwide. Thanks to the interrelatedness of the four independent components, they might become Taiwan's first globally successful app family.

Translated from the Chinese by Susanne Ganz