2025 Analysis
| Assessment: U.S.-Lead | Confidence Interval: Moderate |
| Direction: Trend Contested | Confidence Interval: Moderate |
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The United States Leads But New PRC Platforms Are Catching Up
Overall, U.S. Internet platforms maintain a lead in terms of overall market capitalization, and the majority of the global population uses them to connect, communicate,[1] and find information.[2] U.S.-based social media companies held the top four spots in monthly active users worldwide as of July 2024,[3] and Google had roughly 90% of the global search engine market share in November 2024.[4] But the steady emergence of new PRC mobile applications onto the global stage over the past two years, coupled with the Chinese Communist Party’s (CCP) increasing calls for self-reliance in both hardware and software, have shifted our outlook.
The emergence and meteoric rise of new PRC Internet platforms[5] — particularly Bytedance’s TikTok, one of the top social media applications among the youth demographic in North America, second only to Youtube[6] — shows that China’s success in this sector was not a fluke, but rather the beginning of a larger trend. Capcut, a video editing tool, also a product of Bytedance, became the fifth most popular app in 2023.[7] PRC e-commerce apps, such as Temu and Shein, have skyrocketed in popularity among global Internet users. Notably, Temu, whose parent company is TDD Holdings, now sits among the top ten most popular apps in 2023.[8] Even new PRC AI startups, like Moonshot.ai and Minimax, have gained a sizable following in the United States, with Minimax’s AI chat app “Talkie” boasting 11.4 million monthly active users.[9]
Source: David Curry, Most Popular Apps (2024), Business of Apps (2024).
Wildcards
- Will U.S. Policy Changes Finally Address the Market Access Imbalance with China? One of the biggest imbalances in this space is that virtually all U.S. Internet platforms are barred from operating in the PRC market, while PRC platforms are able to operate freely in the United States — at least for now. That is likely to change, as the U.S. government is beginning to implement policies aimed at limiting the influence of PRC Internet platforms within its borders. The White House, for example, recently announced a new proposal that would eliminate a customs loophole that Shein and Temu have exploited to import millions of dollars’ of low-value items into the United States tariff-free.[10]
- Could TikTok’s Fate Reshape the Future of PRC-Developed Apps in America? The saga of Tiktok, which is facing potential divestment or a ban in early 2025, underscores the escalating scrutiny and uncertainty surrounding PRC-owned Internet platforms in the United States.[11] However, recent signals from the incoming administration suggest a softened stance toward TikTok, with incoming president Trump indicating that a complete ban may no longer be a foregone conclusion.[12] This shift in policy highlights the evolving dynamics in the debate over PRC technology in the United States and the broader challenges of isolating a PRC-origin mobile application from the U.S. tech ecosystem, especially after it has established such a significant domestic user base. This case and the precedent that the ruling will set could have far-reaching implications for other PRC apps operating in the United States.
What to Watch
- Huawei Advances China’s Mobile Operating System Independence. China’s Huawei is making a play to build an alternative mobile application ecosystem, a space long dominated by Apple’s App Store and Google’s Play Store. Previous versions of Huawei’s mobile operating system were based on open-source Android and operated on a Linux kernel. In November 2024, however, Huawei launched its first smartphones[13] with the capability to run its indigenously-developed “pure blood” mobile operating system.[14]
Source: Global Smartphone Sales Share by Operating System , Counterpoint Research (2024).
The new operating system is reportedly built with completely indigenous code, independent from open-source Android. Huawei’s existing mobile operating system, HarmonyOS, recently overtook Apple’s iOS as being the second most used mobile operating system in China, after Android.[15] Currently, about 700 million devices run on HarmonyOS and 2.2 million third-party developers are creating apps for the platform,[16] with Huawei aiming to build over 100,000 applications for the operating system within the next year.[17] Notably, the Huawei app storefront on these devices has an emulator that allows them to run Android-based apps, a feature that may be particularly tailored for Chinese citizens working abroad.[18] However, HarmonyOS NEXT has a long road ahead before it may pose as a serious competitor to Apple and Google, but its development will be a noteworthy milestone in addressing one of China’s long-perceived gaps in mobile operating systems, a key vulnerability identified by a prominent PRC think tank report in 2022 that was subsequently censored.[19]
[1] Global Social Media Statistics, Global Digital Insights (last accessed 2024).
[2] Search Engine Market Share Worldwide, GlobalStats (2024).
[3] Most Popular Social Networks Worldwide as of April 2024, By Number of Monthly Active Users, Statista (2024).
[4] Search Engine Market Share Worldwide, GlobalStats (2024).
[5] Mapping the U.S.-PRC Tech Competition Landscape, Special Competitive Studies Project (2023).
[6] Monica Anderson, et al., Teens, Social Media and Technology 2023, Pew Research Center (2023).
[7] David Curry, Most Popular Apps (2024), Business of Apps (2024).
[8] David Curry, Most Popular Apps (2024), Business of Apps (2024).
[9] Paul Triolo & Kendra Schaefer, China’s Generative AI Ecosystem in 2024: Rising Investment and Expectations, The National Bureau of Asian Research (2024).
[10] Annie Nova & Gabrielle Fonrouge, Biden Targets Shein, Temu with New Rules to Curb Alleged ‘Abuse’ of U.S. Trade Loophole, CNBC (2024).
[11] Dan Primack, TikTok “Ban Bill” Heads to Court, Axios (2024).
[12] Trump Signals Openness to Stopping TikTok Ban, Softening Stance, Bloomberg (2024).
[13] Arjun Kharpal, Huawei Launches First Phones Capable of Running its New Self-Developed Operating System, CNBC (2024).
[14] Marco Lancaster, HarmonyOS NEXT Launches This Month Without Android, GizChina (2024).
[15] Iris Deng, Huawei’s HarmonyOS Unseats Apple’s iOS to Become China’s No 2 Mobile Operating Platform, South China Morning Post (2024).
[16] Lionel Lim, Huawei’s Homegrown Operating System, Launched After the Company Was Put on a U.S. Blacklist, May Soon Overtake Apple’s iOS in China, Fortune (2024).
[17] Juliana Liu & Hassan Tayir, Huawei’s New Homegrown Chinese Smartphone Takes on Apple and Android, CNN (2024).
[18] Alan Friedman, Surprise! Huawei’s HarmonyOS NEXT Can Run Android Apps, Phone Arena (2024).
[19] Jeff Pao, Academic Report Unveils China’s High-Tech Bottlenecks, Asia Times (2022).