Asia Business Channel

TikTok will make smartphones for the China market

 

ByteDance, the company that owns video-sharing app TikTok, said that it has plans to enter the smartphone market but U.S. consumers won’t be able to buy the new phones. According to representatives of TikTok, the company’s plans, which have been reported in various media have been misreported and misunderstood.

A representative from TikTok said in emails that the company’s smartphone plans relate to Smartisan, a Chinese smartphone maker that ByteDance acquired earlier this year. "Reports of our smartphone development strictly refer to a continuation of plans that were in place before ByteDance began working with Smartisan. “The focus is on meeting the needs of Smartisan's existing customer base in China."

TikTok says that there are no plans to compete directly with the smartphones that are manufactured by Apple and Samsung or other Chinese manufacturers. Instead, the company wants to focus on its existing Chinese user base.

China has more than 200+ Chinese companies manufacturing smartphones, but five companies dominate the market: Apple, Huawei, Opoo, Vivo and Xiamoi. Compared to these major companies, Smartisan has a very small market share, however the company has been able to raising its profile by hosting over-the-top media events where consumers pay to hear the CEO’s sales pitch and see performances from popular local artists.

ByteDance’s decision to build its own smartphone is the latest in a number of business announcements by the company as it moves to expand its offerings beyond entertainment and news apps. As one of several business experiments by the company, ByteDance has entered messaging with Flipchat, and the company is also said to be considering launching a music-streaming service later this year.

ByteDance is relatively unknown outside of China. The company has created several popular apps for the Chinese market including Duoshan, a popular Snapchat clone and Toutiao, a news aggregator. ByteDance’s most successful app has been TikTok, which has more than 500 million global monthly active users.

In China, TikTok is known as “Douyin.” The app was launched in 2016 and reported that it had 300 million Chinese users in June 2018. The international version of Douyin, which is TikTok, was launched in September 2017 and by July 2018 the app had 500+ million global users who were active on a monthly basis.

Commenting on Smartisan and TikTok business plans, the TikTok representative said that the TikTok software would come preloaded onto new Smartisan smartphones, and the company’s strategy is to encourage users to stay within the family of entertainment and education apps that are created by the company.

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