Alibaba to launch mobile operating system

Alibaba Group, the Chinese e-commerce company, is mounting a challenge to several leading technology companies with the launch of its own mobile operating system.

Beijing Tianyu Communications Equipment, a Chinese handset maker, will launch the first smartphone running on Aliyun, the new operating system, by the end of July, and release a tablet computer featuring Alibaba’s operating system by the end of the year, Wang Jiang, president of Alibaba Cloud Computing, told reporters.

That will put the group, which has competed with foreign rivals such as Ebay , in competition with a whole new league of foreign and domestic companies.

China is the world’s largest mobile handset market by users, but the vast majority of its more than 800m mobile subscribers have yet to start using smartphones, the devices that allow a wide range of data services for work and entertainment.

The country has become an increasingly important market for handset makers and content providers for all the main mobile operating systems including Apple iOS, Google’s Android, Nokia’s Symbian and Microsoft’s Windows Phone.

So far, Alibaba Group’s business is focused on e-commerce –, its listed flagship, runs online storefronts and other services for Chinese and foreign suppliers in the wholesale trade. A number of unlisted units run Taobao, its domestic consumer e-commerce business, and online search operations.

By offering e-commerce and e-payment applications, the new operating system could help Alibaba Group ensure its consumers stick to Taobao when they use the mobile internet. But Alibaba executives made clear that the group’s ambitions go far beyond that.

Aliyun features services including cloud-based e-mail, internet search, weather and mapping and GPS navigation, the company said. It argues that servicing many apps from the cloud instead of requiring users to download applications to their phones will create an experience superior to existing operating systems.

Alibaba also said China-based developers offered lower developing costs and would make smartphones more affordable to Chinese consumers.

Alibaba’s initiative will put it into competition with China Mobile, the country’s largest mobile operator, which has invested heavily in mobile payment systems. Alipay, a former group company now controlled by Jack Ma, Alibaba Group chairman, competes with that.

But the new operating system also creates a new competitor for Google and Apple, and could allow Alibaba to build a much broader user base among consumers. Alibaba executives argue that the new system’s feature of storing text messages in the cloud rather than on the handset makes it superior to the iPhone.

Separately, Alibaba could push into the vacuum created by Google’s dispute with the Chinese government.

Since the company relocated its web search from mainland China to its Hong Kong website last year, some Google mobile applications such as Gmail have been unavailable or blocked on Android smartphones sold in China. While Baidu, China’s largest online search company, has picked up much of Google’s web search market share, no major player dominates this niche yet.

Additional reporting by Chen Yuanni

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't cut articles from and redistribute by email or post to the web.