Core Insights - The AI application market is rapidly evolving, with a significant increase in user engagement across various segments, leading to the formation of four distinct tiers of applications [1][12][19]. Group 1: Market Overview - As of June 2025, the first tier includes AI search engines and comprehensive assistants, with monthly active users (MAU) reaching 685 million and 612 million respectively [1]. - The second tier consists of AI social interaction and professional advisors, with MAUs of 126 million and 111 million [1]. - The third tier includes AI efficiency tools and image processing applications, with MAUs of 69 million and 49 million [1]. - The fourth tier encompasses AI creative design, copywriting, and educational applications, each around 20 million MAUs [1]. Group 2: User Engagement Trends - The "In-App AI" model has seen a user base of 630 million, while native apps have 570 million users, and PC web applications have 180 million users, indicating a shift towards mobile and integrated solutions [1][9]. - The growth of application plugins reflects users' preference for seamless AI experiences, with notable usage rates for Baidu AI and Quark AI search at 9.6% and 56.0% respectively [2][19]. Group 3: Competitive Landscape - The market is witnessing a dual oligopoly, where the combination of "search + service" is reshaping traffic entry points, leading to service integration and the development of intelligent agents [12][24]. - The majority of PC web players are facing decline, with 80% of them having user counts below 500,000 and 68.8% experiencing negative growth [2][31]. Group 4: Application Performance - Among software service providers, the photography and beautification sector is rapidly adopting AI plugins, driven by the "aesthetic economy" [14]. - As of June 2025, the average app with AI integration has 2.1 AI applications, with photography apps averaging 5.5 AI features [15][27]. Group 5: Future Outlook - The integration of AI into mobile applications is expected to enhance user engagement, with a focus on system-level integration capabilities [9][49]. - The competition will hinge on becoming the "only option" in users' minds or embedding deeply into essential workflows, with model iteration speed and ecosystem integration being critical factors for success [56].