The Beijing based company, Bytedance is currently on a growing spree. The TikTok parent, Byetdance is reportedly working on the manufacture of its own smartphones with its apps like TikTok, Toutiao, BuzzVideo, Vigo Video pre-installed in the phone. This decision will be supported by certain patents acquired by the company such as Smartisan, which is a Chinese multinational technology company based out of Beijing and Chengdu. It designs and markets electronic devices and online services.
In January, while the acquisition, Bytedance told that their idea is to “explore the education business”. It is to be brought in the notice that Smartisan is remotely associated with business education. This action undoubtedly means that the company is now preparing itself to enter the hardware market. Apart from this, the founder Zhang Yiming, “has long dreamt of a phone with Bytedance apps pre-installed.”
India- A Major Market For Byetdance
Bytedance was launched in India in the mid of 2017. Today, Bytedance has 300 million users from India itself. German database firm Statista revealed that TiokTok alone has 200 million users out of which 120 million are active on a monthly basis, compared to 300 million Facebook users. Despite the tension that prevailed with the Indian Government and after being banned for 20 days in the country, Bytedance is planning to invest $1 billion and has already invested $100 million.
With this announcement, it is clear that the company is now going to compete with established giants like Apple, Samsung, Vivo, OnePlus and many other local brands. The real question that lies here is that how sensible is it for Bytedance to enter the electronic hardware market and compete for the giants like Apple, Vivo, OnePlus, etc.
Is it sensible enough?
The US market will be very difficult for them to penetrate as the US might not allow them due to their privacy concerns as they believe that Chinese companies are a threat to their privacy and security, the same reason Huawei was banned for in the USA. At the same time, currently, the Indian market is abundant of the Chinese brands. A research done by Counterpoint stated that in the first quarter, Chinese manufacturers led by Xiaomi controlled the enormous 66 percent of India’s smartphone market.
Bytedance is a dominant player in China and also one of the few Chinese companies which could make their presence at a global level and dominated the western markets as well. However, a social media company trying to enter the electronics hardware field will pose a lot of competition to them. As of now, they do not have an established team to manufacture their hardware. The only advantage that Bytedance has that it has millions of users and that it has a global presence. There have been a few social media companies who tried to enter the electronic hardware market and failed terribly, that includes Facebook and Snapchat. Facebook could not sell more than 15k units and decided to call off the business which must have caused a huge loss of time and money as well. In 207, Snapchat also came across an idea of developing hardware, particularly cellphones. However, the plan was dropped later on.
Bytedance has a massive presence at a global level and has a gigantic reach but the only question is how fruitful would it prove for the company? Considering the above-stated incidents about Facebook and Snapchat, Bytedance should be little cautious about the decision.