Bytedance, the privately-held Chinese company behind the globally popular streaming app TikTok, is reportedly planning to make a move into hardware with a smartphone product.

According to the Financial Times, which broke the story, two people familiar with the hardware project have revealed details of the development process.

One of the world’s most highly-valued startups, the sources explained that the company plans to launch a phone pre-loaded with its own popular apps. As well as TikTok (Douyin in China), the company also boasts a popular news aggregator, Toutiao, as well as several games.

The development follows Bytedance’s acquisition of several patents originally filed by the Chinese phonemaker Smartisan, as well as the recruitment of some of its staff, the FT added.

There is a possible opportunity. Following the mounting pressure of the US-China trade war, which has seen the US place a ban on exports to Huawai, some Chinese companies are thinking about shoring themselves up for a more self-sufficient future.

But the smartphone market has tended to duopoly, both of which are dominated by US companies: Apple and Google, through its mobile operating system, Android. New entrants, even from massively powerful tech competitors to both incumbents, have struggled and most have failed. See the Windows phone, which Microsoft stopped producing at the beginning of 2019. Even Amazon had a go at the mobile market, with the Fire phone, which it pulled after just one year on shelves.

Analysts predict that Bytedance faces a similar fate for several reasons. The market is, first and foremost, beholden to platforms large enough to sustain an app ecosystem. The struggle that both Windows and Amazon faced was that developers were unwilling to develop their apps for even more operating systems than the two incumbents. This instantly limits consumer demand, even when your plan is to undercut the market – as in Amazon’s case, in which its phone retailed for less than £90.

But such a strategy requires some significant supply chain experience. This is difficult to come by. “If they target only the niche market, maybe they have a chance by attracting niche consumer groups through certain pre-installed software”, noted Jia Mo, an analyst at Canalys in Shanghai.

Though Bytedance’s success around the world with TikTok has been significant – in March it hit one billion downloads – the firm has incurred the wrath of regulators in both India and the US, where it received a $5.7m fine for collecting children’s personal information.

As an in-depth WARC report about the platform found, TikTok is the first Chinese media owner to truly change the mobile usage and content consumption habits at a global level, ushering in new user expectations of shorter video experiences, a fresh take on the idea of social media influencers, and the beginnings of a Chinese ascendency in the media space.

Sourced from the Financial Times, WARC