Recently, the US House of Representatives passed an order forcing Tiktok to cut ties with China or leave this market, which has had a strong impact on Tesla and Apple. The Washington Post emphasized that the Beijing government will likely take retaliation, targeting large American corporations that depend on this market.
In 2023, China accounts for 50% of Tesla’s sales and 20% of its production capacity while 95% of Apple’s iPhones, AirPods,Β Β MacsΒ Β and iPads are manufactured in China. This is also the market that accounts for 1/5 of Apple’s total revenue, about 74 billion USD in 2022.
Faced with this situation, both Tesla CEO Elon Musk and Apple CEO Tim Cook are extremely worried, while Meta (Facebook) boss Mark Zuckerberg is happy because there are not many activities in China and can Take advantage of opportunities when Tiktok is in trouble.
However, what few people pay attention to is that it was Meta (Facebook) who promoted the story of banning Tiktok, which was carried out by Former US President Donald Trump and then rejected by his successor Joe Biden.
According to eMarketer, Meta can account for 22.5-27.5% of advertising revenue from Tiktok, thereby earning more than 2 billion USD for Mark Zuckerberg in 2025. As for Google, this group can also get 15-20% if Tiktok is banned in the US.
People laughing…
Business Insider (BI) said that since surpassing MySpace 15 years ago, Meta (Facebook) has grown explosively thanks to the formula of acquisitions, mergers and capturing competitors. They acquired Instagram and WhatsApp, adopted Story like Snapchat and most recently built Threads to compete with Twitter-X.
However, this formula is no longer useful for Tiktok.
In 2016, Facebook tried to buy Musical.ly but ended up letting ByteDance take over, subsequently creating one of the most formidable rivals for Mark Zuckerberg. Faced with this situation, Meta launched Reel as a product copying Tiktok but it did not create a big hit.
In 2022, after the number of active users on Meta decreased for the first time, Mark Zuckerberg had to sadly admit that they were threatened by Tiktok to take away market share.
Having difficulty implementing the old formula to crush Tiktok, Mark Zuckerberg has turned to a new way to defeat his opponent: politics.
“While our applications strongly protect privacy, Tiktok, a Chinese application, censors many free content, even in the US market itself. Is that a the Internet platform we want,” Mark Zuckerberg said at Georgetown University.
The Washington Post said that since 2022, Meta has been quietly lobbying when contacting the consulting organization Targeted Victory to promote the story of Tiktok having a negative impact on π€π©πͺππ₯ren and American society.
The increased spread of stories about Tiktok spreading false information and collecting user data causing insecurity in the US quickly paved the way for US politicians to get involved.
Even when the US Federal Trade Commission (FTC) accused Meta of illegally using user data, the platform responded directly that the government was “allowing Chinese companies like Tiktok to collect data”. users right on US territory”.
This measure has been proven successful in India when Tiktok was banned, users quickly switched to Instagram Reels or Youtube Shorts.
Similarly, eMarketer believes that Amazon can also breathe a sigh of relief when Tiktok is banned because the e-commerce potential of this platform is too great and can threaten this empire.
“Banning Tiktok will only make big companies like Meta or Google more monopolistic, but will not affect the security of the American people too much,” director Evan Greer of “Fight for Future” said frankly.
…the one who cries
“China is leaving open all possibilities right now. Some US technology companies may face the risk of becoming victims in the current conflict,” said expert Xiaomeng Lu of Eurasia Group.
Obviously, the fact that Tiktok faces the risk of being banned in the US is not very happy news for Elon Musk when China plays such an important role for Tesla. This billionaire personally admitted in 2023 that the US-China conflict was a risk to the company’s development prospects.
Currently, Tesla is facing a comprehensive crisis in China due to the strong rise of local manufacturers. The company is planning to cut 20% of its staff in the context of a 20% decrease in sales globally. Meanwhile, Elon Musk’s war on price suppression in the country of billions of people has not ended yet as cost cutting is the strength of local factories.
On the contrary, continuous price cuts are eating into Tesla’s profits, but even so, sales are still declining as consumers prefer low-cost products or Hybrid cars.
CCB International analyst Ke Qu forecasts that competition will increase and become fierce in the second quarter and may continue into the third quarter of 2024 in the Chinese electric vehicle market.
Currently, more than 40 automakers in China have reduced prices or offered discounts just this month after BYD (the world’s leading electric vehicle selling brand) reduced prices by 10% – 15% for new car models. February 2024.
“This is the first time in the history of the auto market that such a large-scale price reduction has occurred,” expert Ke warned.
Not to be defeated, Tesla also reduced prices by 14,000 yuan for models 3, Y, S and X, after reducing prices in the US and Europe in recent days.
Tesla’s shares have fallen nearly 40% this year and will likely suffer even more damage if the Beijing government takes action to retaliate against the Tiktok incident.
Similarly, Apple is also extremely worried about the possibility of retaliation from China. A recent report shows that Apple’s iPhone sales in the Chinese market decreased by 19% in the first quarter of 2024, marking the worst business performance of this phone line since the COVID-19 pandemic occurred. coming out around 2020.
According to estimates by Counterpoint Research, Apple has dropped to third place in this fiercely competitive phone market, nearly equal to its fast-growing rival Huawei. Meanwhile, the overall market expanded about 1.5% with domestic brands like Honor and Xiaomi leading the growth.
China remains one of Apple’s biggest markets, but doing business there became more difficult after Beijing strengthened its ban on foreign devices in state-owned companies and government agencies. Consumers are also embracing Huawei’s return to prominence after it launched its own Chinese-made chip – something US sanctions attempt to block.
The iPhone maker had to resort to “unusual” discounts in January in China to help maintain sales of its latest generation devices. The company’s retail partners in this market also offer discounts of up to 180 USD compared to the regular price.
Even CEO Tim Cook had to rush to visit China as a move to appease the people and the government amid pressure from both sides.
On the one hand, the Washington government wants Apple to move factories to the US or other countries, while Apple needs China more than ever to maintain growth.
Clearly, Tiktok’s ban in the US is benefiting a group of technology giants and also threatening another group of large corporations.
