Baidu Inc has invested 1.01 billion yuan ($159.7 million) in Coocaa, a smart television unit owned by consumer electronics producer Skyworth Digital Holdings Ltd, as part of the search giant's wider push into the smart hardware sector.

After the transaction, Baidu will hold 11 percent of the company, becoming the second largest shareholder of Coocaa, with the valuation of the latter reaching 9.59 billion yuan, according to a statement from Skyworth Digital.

The two companies also reached a strategic partnership on Friday to cooperate in the fields of technology, content, data and operation. Meanwhile, Baidu's DuerOS conversation-based artificial intelligence system will have a deeper integration with the intelligent home products of Coocaa.

Robin Li, chairman of Baidu, said its DuerOS open platform could change the interaction method between television and humans, as nowadays the intelligent TVs can hear, understand and follow users' orders.

Built on Baidu's ecosystem of information and services, DuerOS, as one of the leading applications of AI technology, delivers comprehensive solutions by allowing users to command and converse with their devices using natural language.

"We should actively embrace technology innovation in the era of artificial intelligence, and the company is in an important stage for transformation and upgrading," said Huang Hongsheng, founder of Skyworth.

Huang added they will deepen cooperation with Baidu to introduce its DuerOS system, as well as the content resources from iQiyi.com, a video-streaming service provider backed by Baidu.

The principal businesses of Coocaa include smart TV system operations and related value-added services. Coocaa reported a net profit 9.59 million yuan in 2016.

Baidu has stepped up efforts in the smart home sector and partnered with TV manufacturers, such as Lenovo Group, TCL Corp and Haier Group, to launch AI-enabled TVs, to support the development of internet of things industry.

"It is a trend that more and more traditional home appliance makers cooperate with tech giants in artificial intelligence," said Zhang Yanbin, assistant director of Beijing-based consultancy All View Cloud.

According to statistics from market consultancy Statista, China's smart home market is expected to reach a value of 130 billion yuan by 2018, with an annual growth rate of about 48 percent, a big jump from the 40.3 billion yuan market in 2015.

"The smart home industry is now developing by leaps and bounds, thanks to the advancement of internet of things, big data and other technologies. With people's increasing requirement for a high-quality life, the AI-enabled smart home sector has a promising future," Zhang said.