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Alibaba, Meizu team up against Android

Posted: 10 Feb 2015 ?? ?Print Version ?Bookmark and Share

Keywords:Yun OS? Internet of Things? e-commerce? smartphones? Android?

Alibaba Group Holding Limited revealed its investment in Meizu, one of China's smaller smartphone vendors, worth $590 million. The two companies, however, refused to disclose the size of the stake.

Under the agreement, Alibaba Group and Meizu will work together to integrate "Meizu's hardware with Alibaba Group's mobile operating system." Through Alibaba Group's online shopping marketplaces, Meizu will receive online distribution channels for its smartphones and other devices. The strategy is similar to that of Xiaomi, which only sells its products on the Internet. It has no retail stores or third-party distributions.

Why smartphone now?

This is e-commerce giant Alibaba's first direct investment in a smartphone vendor. Its motive is believed to be similar to Amazon's entry in the smartphone market last summer with its Firephone.

In China, however, this move is viewed more as a desperate effort by Alibaba to compete more effectively against rivals such as Tencent Holdings and Baidu in the increasingly competitive Chinese Internet marketCespecially in the mobile space.

Meizu smartphone

Meizu smartphone

Clearly, gaining more mobile usersCswitching from desktopCto Alibaba's e-commerce site must be Alibaba's number one goal. More Chinese accessed the Internet from mobile devices than from computers for the first time last year, according to data recently released by the China Internet Network Information Center.

One Chinese industry source based in Beijing, who declined to be named, told EE Times, "Alibaba will use Meizu to fight Tencent's Internet of Things (IoT) initiative, which is far ahead at the moment with the weChat." WeChat is a mobile text and voice messaging service developed by Tencent, whose active users were estimated to be as many as 438 million last summer.

Others describe Alibaba's motive more as a fight over the operating system. Alibaba is reportedly hoping to push Yun OS (or Cloud OS) deeper into mobile. Alibaba's subsidiary AliCloud developed Yun OS a few years ago in an effort to drive users to Alibaba's e-commerce applications and other services. So far, Yun OS has had limited success.

While Google calls Yun OS "a forked but incompatible version" of Android OS, Alibaba claims that its OS "incorporates its own virtual machine, which is different from Android's Dalvik virtual machine."

Why Meizu?

Meizu is one of the few Chinese manufacturers to preload YunOS in its phones.

The two companies are no strangers to each other. Alibaba and Meizu signed a strategic agreement in October 2014, under which they are working together on the launch of Meizu's Flyme smartphone. Meizu said then that "more cooperation" would take place between the two companies.

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