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Ambitious Alibaba wants to take on Android

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The smart choice: opportunity from uncertainty

Not content with dominating the massive Chinese e-commerce market, local hero Alibaba now wants to chase Android into the sea by making its cloud-based Aliyun mobile operating system China's preferred smartphone OS.

The company’s chief strategy officer, Zeng Ming, told the Wall Street Journal that the firm is set to more than double the number of handset vendors on board, from two to five, by the end of the year.

At present, the Linux-based Aliyun can be found on K-Touch phones from Beijing Tianyu Communication Equipment, and handsets from home appliances firm Haier.

“We want to be as strong as Android in China," Zeng told the paper. "We have quite a few [new handset partners] lined up."

Things have gone pretty well so far, with the OS passing the one million unit sales mark less than a year after it was launched out of Alibaba’s AliCloud business in July 2011.

So far Alibaba has concentrated on the low-end of the smartphone market with models like the K-Touch W806 and W619, which retail for a budget 1499 yuan (£152) and 699 yuan (£70).

This makes sense given the huge potential growth in this part of the market as legacy feature phone users make the move to a smartphone.

Analyst Canalys' statistics from August show smartphone shipments leapt 199 per cent in China compared to the same period last year. Some 42 million smartphones were shipped into the channel in the People’s Republic – 27 per cent of the global figure and some way higher than the US with 16 per cent.

Aliyun could also prosper from the increasingly fraught international patent battles which are likely to be making Android handset makers nervous.

Aside from Microsoft’s long-term strategy of seeking royalties for every device made running the Google OS, there is the spectre of Apple’s monumental patent victory over Samsung – although Google has claimed its ‘core OS’ will not be affected.

Alibaba’s Zeng certainly turned up the fear-mongering in his interview with the WSJ.

"If I were a handset maker and if the only option is Android, I would be scared," he said. "Any company would like to have at least two suppliers."

Teck Zhung Wong, a senior market analyst at IDC, told The Reg that, given Android’s market share in China is over 70 per cent now, Alibaba’s vaulting ambitions may be a little difficult to achieve.

“For Aliyun OS to be ‘as strong as Android’, it will mean a collapse in Android shipments, which is extremely unlikely. Though Aliyun OS has several highly localised features that are perhaps more suited to the Chinese consumer, the OS remains a niche product and will struggle to get scale and attention,” he said.

“Let's not forget the other Chinese OSes that compete with Aliyun OS for the Chinese consumer,” he added.

Aside from Microsoft's Windows Phone, these other companies include search giant Baidu, handset maker Xiaomi, and even operators like China Unicom, all trying to drive extra revenue through China’s rapidly expanding mobile market, as described in an IDC report recently. ®

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