Who hasn't heard about TikTok? It is one the most popular streaming apps right now. Its parent's company - a Chinese IT firm is planning to take a step into the smartphone manufacturing industry as well. ByteDance, whose $75 Billion valuation ranks it one of the world's biggest start-up plans to launch a phone pre-loaded with its own apps - which include newsfeeds, video and gaming apps to reach out more global audience. This move is seen by many as an initiative by Chinese companies to rely on their own services, software, and hardware after the US ban. ByteDance is one of very few companies from china who has global audience in Asia and west, other than its home country.
Earlier than this, Amazon has tried similar effort but it was pulled a year after launch due to its disaster failure. Analysts predict ByteDance phone could have a similar outcome. Analyst Jia Mo said, there is basically no space for them in the mass market. They lack experience and advantage in supply chain, in channels, so their likelihood of being successful is very low, he further added. If they target only the niche market, may be they have a chance by attracting niche customer groups through certain pre-installed software.
Bytedance's own international expansion has helped the company to acquire its lip-syncing Musical.ly app in 2017. But despite racking up huge number of downloads- it was fined by the Federal trade commission for illegally collecting personal information from users younger than 18 years. Wang Xi, research manager said that may be they could have a chance if they offer something new and at lower price. He said, So if they really will go down this path, I think they will probably let hardware lose money in the beginning and try to make up through their service later.
We recently heard the news about TikTok being banned on the App Store as the Trump administration considers it as a national security threat. TikTok was set to be removed from the Apple App Store and Google Play Store as soon as Sunday, September 20 for those in the US. The ban was issued by the US Department of Commerce, and also included Chinese social network WeChat which is widely used for payment processing around the world. After this ban users in the country had no way to download or install this app.
Meanwhile, ByteDance, the company behind Tiktok, was in talks with the Trump administration to decide on terms and conditions so they could continue to operate in the country. The flexibility shown by the company had caused a cease of the ban for some time. As the latest news, President Trump has approved the partnership of Oracle and Walmart with ByteDance. Reuters reports that the approved deal will allow Oracle and Walmart to run a new company called TikTok Global, which will be based in Texas. This means that more than half of TikTok Global will be owned and managed by US investors.
In a statement, President Trump said that the TikTok Global will be operational from the US-based office and will provide around 25,000 new jobs in the US. He also promised that this transition will remove any security threat, if ever existed, with all its data being stored on the servers in the US.
So far, there isn't any written agreement between Oracle/Walmart with TikTok and we have to see what will happen to TikTok Global in the US. There isn't any guarantee that US investors will go ahead and invest in the app. But, so far, if you are using TikTok in the US, you can keep using it. In a press statement, the company said, "We are pleased that the proposal by TikTok, Oracle, and Walmart will resolve the security concerns of the US Administration and settle questions around TikTok's future in the US."