Alibaba to invest in Chinese phonemakers to drive Aliyun adoption

E-commerce company is reportedly turning to Shenzhen-based phonemakers to drive its mobile OS adoption after Google blocked Android partners from launching devices with Aliyun OS.
Written by Liau Yun Qing, Contributor

E-commerce giant Alibaba is reportedly planning to invest and buy stakes in Chinese phonemakers to drive the adoption of its Aliyun OS mobile operating system (OS).

A Sohu IT report Friday cited unnamed industry sources who said Alibaba planned to launch more than 20 smartphones with Aliyun OS in 2013 and will invest in or buy up controlling stake in one or two Shenzhen phonemakers.

The source said that since the fourth quarter of 2012, high-level executives from Aliyun have been frequently visiting several Shenzhen phonemakers, reported Sohu IT. Apart from discussing issues such as the installation of Aliyun OS in the devices, the executives were said to have reached "concrete discussions" about investments or buying controlling stakes.

Alibaba's move to invest in Chinese phonemakers were supposedly driven by Google preventing its Android partners from launching Aliyun phone.

In September 2012, Alibaba had declared that it wants to be the "Android of China" to provide an alternative to the U.S. company's mobile OS. However, within the same week, Acer had to cancel the launch of a Aliyun smartphone or else Google would end its Android partnership with the Taiwanese company.

According to Google, the Aliyun OS was an incompatible fork of Android. However, an Alibaba executive denied the claim and said Aliyun "is different" from Android.

A week after the tussle, Alibaba spun off its mobile OS team from the cloud computing division, where the Aliyun OS team would report directly to the parent company. The internal memo by chairman and CEO Jack Ma added the group would be investing US$200 million in the development of Aliyun OS.

An Informa Telecoms & Media report December said China was the largest Android market in the world in 2012, with two out of three mobile phones sold there being Android devices. Despite restricted Google services in China, smartphone makers told ZDNet in October 2012 that they replace Google services with local apps and content to ensure user experience is not compromised.

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