The Strategist

TikTok owner to create a new smartphone

05/28/2019 - 11:46

Chinese company ByteDance, which owns the popular video service TikTok, decided to create its own smartphone. The company expects that pre-installed applications will increase sales, but experts doubt it.

The Financial Times reported, citing two sources familiar with the project, that ByteDance intends to start production of its own devices. The newspaper’s interlocutors said that the Chinese company plans to supply smartphones with its pre-installed applications - news aggregators, video services and games.

According to FT, the idea to create their own smartphone was introduced by the founder of ByteDance Zhang Yiming. One of the publication’s interlocutors noted that Zhang had been talking about the idea of creating his own smartphone for a long time. Earlier, a startup has acquired several patents from the Chinese manufacturer of gadgets Smartisan, and also lured away several of its employees.

ByteDance is estimated at $ 75 billion, which makes it one of the largest startups in the world, FT notes and adds: unlike many other Chinese IT companies, it has many more users in foreign countries than in China - first of all in India and the USA. In March, the number of downloads of its main service TikTok exceeded 1 billion.

Analysts surveyed by the newspaper believe that ByteDance is unlikely to achieve success: similar projects of Amazon and Facebook failed at the time. Experts pointed out that there is no place in the mass market for such devices, and ByteDance itself does not have experience in developing devices. Neither it has well-established channels for implementation of its gadgets.

In addition, concerns are also caused by the trade war between the United States and China, which has already led to problems for the largest smartphone maker in the world - the Chinese Huawei. Recall, Google closed access to its services for the company, except for the Android operating system. The American authorities have claims to ByteDance as well. The company was suspected of illegally collecting personal data of children, FT writes.