Hangzhou-based Alibaba Group Holding
Ltd.
will acquire a stake in Meizu, a Chinese
smartphone maker, as it looks to expand its presence in mobile
technology.
On Monday the e-commerce giant announced it would pay US$590 million for a minority stake in Meizu Technology Co., a closely held gadget maker
based in the southern Chinese city of Zhuhai, says The Wall Street Journal.
The deal comes as Alibaba looks to expand its presence in mobile and continues to pursue its own mobile-operating system. Although the rivals Alibaba, Baidu Inc. and Tencent Holdings Ltd. hold strong positions in each of their own corners of the Chinese Internet, they seek securing space on the country’s smartphone and tablet screens.
Alibaba’s investment marks the largest move so far by a Chinese Web company in smartphones, and comes after similar moves by Internet giants in the West. Amazon.com Inc. unveiled its Fire Phone in June with features that made it easier to shop on its mobile marketplace. Google purchased Motorola Mobility in 2012 to make phones running its Android operating system, although it sold the phone maker to Lenovo in October. In a smaller Chinese deal, Qihoo 360 Technology Co. said in December it would invest $409 million December in a joint venture with Shenzhen-based smartphone maker Coolpad Group Ltd.
In the meantime, the move could bolster Meizu against larger rivals like Xiaomi Corp. and Lenovo Group Ltd. Meizu said it aims to sell 20 million smartphones in 2015. China’s three largest domestic smartphone vendors Xiaomi, Lenovo and Huawei Technologies Co. have each announced targets of selling more than 100 million units this year.
Alibaba began a partnership with Meizu last year to make smartphones running its mobile operating system YunOS. Alibaba originally launched YunOS in an effort to drive users to its e-commerce apps and other services, but the company has made limited headway switching major smartphone players from Google Inc.’s dominant Android mobile-operating software.
Originally a manufacturer of MP3 players in southern China, Zhuhai-based Meizu has transformed itself into a seller of advanced, budget smartphones to Chinese consumers who want iPhone-like devices at a lower price, says The WSJ. Similar to its larger competitor Xiaomi, Meizu uses a business of selling devices that are bargains compared with major brands with similar specs and relying on social media to drive sales.
“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 Alibaba Chief Technology Officer Jian Wang in a statement.
