Alibaba Invests $590 Million In Chinese language Smartphone Maker Meizu

Alibaba Invests $590 Million In Chinese Smartphone Maker Meizu

Alibaba is stumping up greater than half a billion dollars to kick its lacklustre cell phone enterprise into gear. The NYSE-listed e-commerce big at the moment introduced a $590 million funding in Chinese language telephone-maker Meizu.

The deal grants Alibaba an undisclosed “minority” share within the Guangdong-based mostly firm, which bought 1.5 million of its Android-based mostly smartphones in January, however it’s notably notable for the strategic alliance between the 2.

Meizu, which operates a Xiaomi-like on-line gross sales mannequin however is but to interrupt into China’s prime 5 smartphone corporations based mostly on gross sales, will combine its hardware with Alibaba’s struggling working system. Aliyun is the enterprise unit behind Alibaba’s Yun OS, which is predicated on Android and used for smartphones and sensible TV units.

“Alibaba Group will present Meizu with assets and help within the fields of e-commerce, cellular Web, cellular working system and knowledge evaluation with the purpose of creating Meizu’s smartphone ecosystem,” the corporate stated in an announcement, which additionally revealed Meizu’s telephone shall be bought by way of Alibaba’s vary of on-line retail websites.

“The funding in Meizu represents a big enlargement of the Alibaba Group ecosystem and an essential step in our general cellular technique as we attempt to convey customers a wider array of cellular choices and experiences,” stated Jian Wang, Alibaba’s CTO, in a press release.

Whereas Alibaba is greatest recognized for its formidable assortment of e-commerce websites — together with market Taobao and excessive-finish ‘mall’ T-Mall — the corporate, like Amazon, has its tentacles in a variety of different areas, together with sensible TVs and cellular units.

The transfer is an fascinating one when you think about that Xiaomi, the smartphone success story of 2014, is quickly shifting into e-commerce after beginning out in cellular hardware and software program. Thus, Alibaba is working backwards. Regardless of a powerful forty % of transactions occurring from cellular units, it needs to succeed in its clients in a extra private and direct method utilizing hardware like sensible TVs and smartphones.

However Alibaba’s strategy to cellular software program is but to bear fruit. Probably the most notable achievable of Aliyun thus far has been a run-in with Google again in 2012, when then head of Android Andy Rubin pressured Acer to cancel a deliberate telephone launch as a result of it was an “incomplete” model of Android. Aliyun was spun out from the primary Alibaba enterprise months later and, regardless of powering some minor units, Alibaba has to date not scored any actual traction with it.

As an investor in Meizu, that’s more likely to change, though Meizu itself is overshadowed by Apple, Samsung, Lenovo and even newcomers like Xiaomi in China’s market. The guess right here for the eleven-yr-previous telephone-maker is that a collaboration with Alibaba — which is determined to make inroads on cellular, having additionally did not create a profitable chat app — will help increase its profile and recognition in China.

Alibaba’s previous cellular investments have included main a $280 million spherical for messaging app Tango, a $one hundred twenty million deal for U.S.-based mostly cellular video games startup Kabam, and a current $10 million funding in Android video games console maker Ouya. It is sensible that it’s trying to complement that target software program and providers with a hardware associate, though Meizu can also be nonetheless but to show itself in China or on the worldwide stage.

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