World’s Largest Privately Backed Start-Up ByteDance Getting Into the Smartphone Business

| Updated
by Teuta Franjkovic · 3 min read
World’s Largest Privately Backed Start-Up ByteDance Getting Into the Smartphone Business
Photo: ByteDance / Twitter

ByteDance, the parent company of TikTok, confirmed it’s developing a smartphone, following a deal it made with device maker Smartisan Technology. ByteDance has risen to become a leading player in tech, rivaling the likes of Baidu and Tencent.

ByteDance, the world’s most valuable start-up, announced they were developing a smartphone, following a deal it made with device maker Smartisan Technology. That plan comes as the Beijing-based company behind popular short-form video-sharing app TikTok, known as Douyin in mainland China, expands into new sectors beyond video and news apps.

In their statement, a ByteDance spokeswoman said a smartphone had been part of Smartisan’s development plans before the deal it made with ByteDance.

She said:

“The product was a continuation of earlier Smartisan plans, aiming to satisfy the needs of the old Smartisan user base.”

Allegedly, the phone had been in development for already seven months with the effort being led by Wu Dezhou, a former executive at Smartisan.

Be it as it may, ByteDance is not the first developer who decided to capitalize on a popular application. In 2013, Chinese selfie-app-maker Meitu started making phones tailored to consumers who really like to take photos of themselves.

The thing is that China became a largely competitive market for smartphone-makers and there are doubts that there is room for another device to stand out.

And not all of the techno giants can be successful in all fields as well. For example, Facebook might be a leader in social networking by acquiring popular apps such as Whatsapp and Instagram, and on the other hand – it fails to branch out into mobile with its own Android launcher app, Home.

Amazon‘s tablets and e-readers may be popular with consumers but its Fire Phone hasn’t been of such luck and it was pulled from the shelves in 2015.

Google, on the other hand, went great with their Pixel phones but their social network, Google+, was finally shut down earlier this year after gradually declining use of the service.

Ben Wood, technology analyst at CCS Insight confirmed it’s extremely difficult for any new entrants to break into the smartphone market profitably, particularly at a time when big brands such as Apple, Samsung, and Huawei are carpet-bombing consumers with millions of pounds worth of marketing.

“There are always niches that open up in the smartphone market but they tend to be ‘firework products’, starting with a big bang and quickly disappearing.”

James Yan, research director at Hong Kong-based Counterpoint Technology said that this move is seen as bold even for China who started shunning smartphones which demand heavier expenditures in research and marketing.

“Gateways that can bring in more users and increase their stickiness are always high priorities for internet companies, and smartphones so far remain the most important access among all.”

He added that cashed-up, ByteDance wants to probe the possibility and “give it a crack”. That would, predicts Yan, require spending of at least US$145 million to US$725 million on an annual marketing campaign alone, a common budget range for the country’s top 10 smartphone vendors.

Wu Dezhou, a former executive at Huawei Technologies and Smartisan, currently leads ByteDance’s smartphone efforts.

Last month ByteDance marketing manager Zhi Ying said that Douyin has more than 300 million monthly users in China. TikTok, Douyin’s global-facing counterpart, has also grown popular in North America. Actually, the app has done so well with both Western and Asian audiences that it recently removed Uber to become the world’s largest privately-backed start-up, with a valuation of $75 billions.

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