If anyone is in any doubt about the global stampede toward accessing digital content on mobile devices, they need only look at a recent development in China: ecommerce giant Alibaba has just invested $590m in the little-known Chinese smartphone developer Meizu.
Alibaba appears at first sight to be following in the footsteps of the US ecommerce titan Amazon which has made forays into the smartphone market with its Fire phone. But dig a little deeper, and you’ll find another motive: Alibaba wants to get its currently seldom-used operating system, YunOS, onto more mobile screens.
And the Chinese smartphone market is undoubtedly a good place to start: China’s online population is migrating en masse from desktop to mobile. For the first time ever in July last year, more people than ever in China accessed online content from mobile devices than from computers. Data emerging this week from the China Internet Network Information Center yields some pretty stark figures: of the country’s 649m online users, 557m are mobile internet surfers.
While Alibaba has a formidable rival for mobile users in Shenzhen-based Tencent, whose flagship apps WeChat and QQ mobile are immensely popular, its performance is not to be scoffed at. Its fourth-quarter results showed that its monthly active mobile users doubled in number compared to the same time the previous year, taking the total to 265m. That’s a fair slice of those 557m Chinese mobile internet users.
Alibaba is investing heavily in extending its reach in mobile technology, having spent around $8bn since the beginning of 2014, most of which went on mobile acquisitions. Previous acquisitions include mobile mapping software firm AutoNavi ($1.5bn) and the mobile browser company UCWeb, with which it’s developed a new search engine – Shenme.
Why Meizu? It’s one of the few Chinese manufacturers to have preloaded its phones with Alibaba’s YunOS (others have been put off by a row with Google in 2012 who accused Alibaba of copying its Android operating system with YunOS – a claim which Alibaba has consistently denied).
According to Wang Yanhui, the head of industry lobbying group Mobile Phone China Alliance, Alibaba is relying on smaller smartphone manufacturers in the rollout of its OS (Meizu is the largest of these).
“Larger companies, any manufacturers with international business, are afraid that they’ll be punished by Google. When they go outside of China they still have to play by Google’s rules.”