What Happens after the TikTok Ban?

The TikTok logo is placed on the US and Chinese flags in this illustration taken, April 25, 2024. (Reuters)
The TikTok logo is placed on the US and Chinese flags in this illustration taken, April 25, 2024. (Reuters)
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What Happens after the TikTok Ban?

The TikTok logo is placed on the US and Chinese flags in this illustration taken, April 25, 2024. (Reuters)
The TikTok logo is placed on the US and Chinese flags in this illustration taken, April 25, 2024. (Reuters)

The US Supreme Court will hear arguments on Friday from TikTok and its China-based owner ByteDance, which is seeking to block a law signed by President Joe Biden that will ban the short-form video app beginning Jan. 19 unless it is divested from ByteDance, due to national security concerns. TikTok requested an injunction to pause the ban during the legal process, but the Supreme Court did not immediately act on the request.

Here’s what could happen on Jan. 19.

WHAT HAPPENS TO THE APP?

New users will not be able to download TikTok from app stores and existing users will not be able to update the app, because the law prohibits any entity from facilitating the download or maintenance of the TikTok application. In a Dec. 13 letter, US lawmakers told Apple and Alphabet’s Google, which operate the two main mobile app stores, that they must be ready to remove TikTok from their stores on Jan. 19.

Cloud service provider Oracle could see some disruption to its work with TikTok. Oracle hosts TikTok’s US user data on its servers, reviews the app’s source code and delivers the app to the app stores.

Google declined to comment, while Oracle and Apple did not respond to requests for comment.

HOW WILL USERS BE AFFECTED?

TikTok’s 170 million users in the US will likely still be able to use the app because it is already downloaded on their phones, experts say. But over time, without software and security updates, the app will become unusable.

Some users have begun posting TikTok videos instructing others on how to use virtual private networks (VPNs), which mask an internet user’s location, as a way to circumvent the possible ban.

Content creators who have built businesses from their TikTok followings are preparing for the worst. Nadya Okamoto, who has 4.1 million followers and founded August, a menstrual products brand, said TikTok helped her business grow organically through viral videos. A TikTok ban could force her and other small businesses to spend more on marketing and raise their costs.

It's very stressful, she said. If TikTok goes away, we'll be okay, but it is going to be a hard hit.

WHAT HAPPENS TO TIKTOK’S EMPLOYEES?

TikTok’s 7,000 employees in the US are still trying to figure out their fate. After a US appeals court upheld the sell-or-ban law on Dec. 6, pessimism spread among staffers who began worrying about layoffs, said one current employee.

But the company has continued to make job offers for new roles, prompting some confused job seekers to seek advice on Blind, an anonymous forum for employees to discuss companies.

One user posted on Blind that they received a job offer from ByteDance in San Jose, California, starting in February. Others commented on the post, counseling the user to accept the offer and use it as leverage in other interviews.

I signed the offer and will wait and watch how the situation unfolds, the user said in the Blind post.

WHAT WILL ADVERTISERS DO?

TikTok’s US ad revenue is expected to total $12.3 billion in 2024, according to research firm Emarketer, and while that is much smaller than Instagram owner Meta Platforms, advertisers say TikTok’s devoted user base means some brands will try to advertise beyond Jan. 19.

The ongoing assumption is the app might not be updatable, but you’ll see a groundswell of usage, said Craig Atkinson, CEO of digital marketing agency Code3. The app’s ecommerce feature TikTok Shop, which lets users purchase products directly from videos, has no direct competitor that advertisers can easily switch to, Atkinson said, adding that his agency was signing new contracts with clients to build TikTok Shop campaigns even as of late December.

Some advertisers may continue spending beyond Jan. 19 on TikTok and reevaluate if the app sees declining usage or performance, said Jason Lee, executive vice president of brand safety at media agency Horizon Media.

ARE THERE POTENTIAL BUYERS?

TikTok has repeatedly said it cannot be sold from ByteDance. That hasn’t deterred billionaire businessman Frank McCourt, a former owner of the Los Angeles Dodgers baseball team who said he has secured $20 billion in verbal commitments from a consortium of investors to bid for TikTok.

McCourt has not yet spoken with ByteDance, but said he believes the Supreme Court will uphold the law requiring TikTok’s divestment, after which the parent company would be more open to sale discussions.

McCourt and his team have had preliminary conversations with members of the incoming administration of President-elect Donald Trump, who had tried to ban TikTok during his first term in the White House but has since reversed his views, and are also seeking a CEO to lead the app. McCourt's business plan for TikTok includes migrating the app onto open-source technology and earning revenue through ecommerce and licensing data for AI training.



Samsung’s Preliminary Q4 Profit Falls Far Short of Estimates as Chip Issues Drag

Samsung Electronics’ booth is seen during Korea Electronics Show 2024 in Seoul, South Korea, October 23, 2024. (Reuters)
Samsung Electronics’ booth is seen during Korea Electronics Show 2024 in Seoul, South Korea, October 23, 2024. (Reuters)
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Samsung’s Preliminary Q4 Profit Falls Far Short of Estimates as Chip Issues Drag

Samsung Electronics’ booth is seen during Korea Electronics Show 2024 in Seoul, South Korea, October 23, 2024. (Reuters)
Samsung Electronics’ booth is seen during Korea Electronics Show 2024 in Seoul, South Korea, October 23, 2024. (Reuters)

Samsung Electronics' preliminary fourth-quarter operating profit missed estimates by a large margin, with the South Korean tech giant hit hard by extra costs as it works towards providing high-end chips to Nvidia.

Its earnings were dented by rising research and development costs and the ramp-up of manufacturing capacity for advanced semiconductors, the company said in a statement. Slowing demand for conventional memory chips used in PCs and mobile phones also weighed on earnings, it added.

The world's largest memory chip, smartphone and TV maker expects to log an operating profit of 6.5 trillion won ($4.5 billion) for the three months ended Dec. 31, well below an LSEG SmartEstimate of 7.7 trillion won.

The expected profit is 131% higher than the same period a year earlier, but down 29% from a disappointing third quarter. Preliminary revenue came in at 75 trillion won, slightly lower than analysts' estimates.

Rival SK Hynix is Nvidia's main supplier of high-bandwidth memory (HBM) chips used in artificial intelligence graphics processing units (GPUs) whereas Samsung has struggled to meet Nvidia's requirements.

Nvidia CEO Jensen Huang told reporters in Las Vegas on Tuesday that Samsung has to "engineer a new design" to supply HBM chips to his company, adding that "they can do it and they are working very fast," Korea JoongAng Daily reported.

Samsung said at the time of its third-quarter earnings that it was making progress in supplying HBM chips to Nvidia but has not made any public updates since then.

Greg Noh, an analyst at Hyundai Motor Securities, said Samsung's profit was possibly eroded by one-off costs as well as disappointing chip and display earnings.

Samsung finished 3.4% higher with analysts attributing the gain to the sense that the company's woes had already been factored in and were unlikely to get worse.

"There are concerns about Samsung's major businesses continuing to lose competitiveness. But chip demand may have bottomed already," said Lee Min-hee, an analyst at BNK Investment & Securities, adding that smartphone demand in China may gradually improve.

Shares of Samsung, South Korea's biggest company by market value, slumped 32% last year, far more than a 10% decline for the wider market.

By contrast, SK Hynix is expected to post record earnings for the fourth quarter and its stock surged 23% last year.

Samsung will release detailed fourth-quarter results on Jan. 31.

RISING COMPETITION

Samsung said fourth-quarter earnings also fell for its division that designs and manufactures logic chips, hit by slower mobile phone demand, lower utilization rates at its factories and higher research and development costs.

The division may have widened losses to about $1.5 billion in the fourth quarter from about $960 million in the preceding quarter due to struggles to increase production yields, analysts said.

Earnings for its devices business, which includes mobile phones, TVs and household appliances, dropped as it has been some time since new mobile phone models were launched and because competition has increased, Samsung said.

Analysts said its mobile division earnings may have declined year on year due to lower sales for its premium foldable phones.

Slowing demand likely offset the positive impact of weakness in the local currency which boosts earnings from overseas.

The South Korean won dropped to its weakest level in 15 years in December after President Yoon Suk Yeol's martial law decree triggered political turmoil. It was also hurt by US President-elect Donald Trump's pledges of higher tariffs on imports.