Chinese company Alibaba is investing more than half a billion dollars to jumpstart its mobile phone business. The New York listed e-commerce company announced today that it will pump $590 million into Chinese phone maker Meizu.
Alibaba invests more than half a billion in Meizu
The deal will give Alibaba a minority share in the Chinese-based company, which sold 1.5 million Android smartphones in January. Meizu has an online-only sales model but hasn’t yet made the top 5 Chinese companies in China in terms of sales, but will integrate its hardware with Alibaba’s mobile operating system. Aliyun is the Alibaba unit behind the company’s Yun OS, which is based on Android and is used both for smartphones and smart TV sets.
“Alibaba Group will provide Meizu with resources and support in the fields of e-commerce, mobile Internet, mobile operating system and data analysis with the aim of developing Meizu’s smartphone ecosystem,” the company said, and also revealed that Meizu’s phone will be sold in Alibaba’s online retail sites.
“The investment in Meizu represents a significant expansion of the Alibaba Group ecosystem and an important step in our overall mobile strategy as we strive to bring users a wider array of mobile offerings and experiences,” said Jian Wang, Alibaba’s CTO.
Alibaba is well known for its huge collection of e-commerce sites, such as marketplace Taobao and online app T-Mall. And like Amazon, it also invests in many other areas such as smart TVs and mobile devices.
The move is interesting because up and coming Xiaomi is beginning to move into e-commerce after initially starting out in mobile – hardware and software. But even though there are now around %40 of online transactions taking place on mobiles, the company wants to reach more customers directly via smartphones and televisions.
Alibaba hasn’t yet been very successful in mobile software, but the mobile OS Aliyun already angered Google back in 2012, as it was going to be used on an Acer handset that was cancelled after Android’s Andy Rubin said it was an incomplete version of Android, and thus disallowed. Aliyun was spun out from Alibaba’s main business a short time later and, despite being used on some minor devices, the company hasn’t yet achieved any notable success with it.
But as Alibaba is now an investor in Meizu, that should change. Meizu itself is overshadowed by other companies such as Apple, Samsung, Lenovo and newcomers like Xiaomi in China. In the past, Alibaba’s mobile investments have included pumping $280 million in messaging app Tango, a $120 million deal for U.S.-based games startup Kabam and a $10 million investment in Android games maker Ouya.