ByteDance has pulled the plug on Smartisan, the Chinese company known for its well-designed smartphones. Both companies had worked together last year to release the Smartisan Nut R2 after reports surfaced that ByteDance had acquired some of Smartisan’s patents and also employed some members of its staff.
According to Chinese media, ByteDance suspended the mobile phone hardware business on January 13. The Chinese company which owns TikTok announced that it has integrated the R&D team established by Smartisan into its own educational hardware team. This educational hardware team is said to be led by Yang Luyu, the founder of Musical.ly. The team will report to Chen Lin, the senior vice president of ByteDance and the head of the education business.
There are a handful of reasons that have surfaced regarding ByteDance’s decision to shut down the Smartisan mobile business. ITHome reports that a mobile phone distributor had revealed that the popularity and sales of Smartisan phones are very low. This is said to be partly because they are sold only online, and those sold offline are usually second-hand units. Another distributor revealed that he purchased a few second-hand units last year but he is yet to sell them. He has decided to write them off as a bad purchase.
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Bigger outlets such as JD.com and Taobao have reported that total sales of the Smartisan Nut R2 flagship phone launched last year is less than 100,000 units. At the moment, the stores have slashed the price from ¥4499 (~$694) to ¥2299 (~$355). Now that news of the business shutting down has surfaced, we do not think anyone will want to buy such a phone.
Another reason that has surfaced is the cost of production. ByteDance doesn’t have the supply chain advantage that bigger manufacturers such as OPPO, Vivo, and Xiaomi boast of, so the production cost is more expensive. It has been reported that ByteDance has switched to the development of desk lamps for its education business.
Wondering why desk lamps? A research institute, Multi-Whale Capital Education Research, predicts the K12 education smart hardware market will reach ¥57 billion by 2022 and smart lamps are part of the products that have gained popularity. Last October, ByteDance announced the Dali Smart Tutoring Lamp which has a screen and an educational coach built-in.
This may not be the end for Smartisan as there is a possibility that an investor or buyer may enter a deal with the owners to bring its products back to the market. However, if that is going to happen, the mistakes of the past will have to be avoided.
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