China's Alibaba Unveils New Mobile OS

Chinese e-commerce giant Alibaba Group has launched its own mobile operating system for handsets and tablets in its home country, with the aim of promoting its online products in its home country as both Android and Apple's iOS devices grow in popularity.

Alibaba subsidiary Alibaba Cloud Computing unveiled the Aliyun OS on Thursday, and showed off a Chinese-manufactured smartphone using the Linux-based operating system. The phone will go on sale in China at the end of the month for 2,680 yuan (US$416). A tablet running the operating system will also be launched in China later this year.

The Aliyun OS not only can run Android apps, but it can also run Web-based apps built with HTML 5 or JavaScript. This feature will allow Alibaba and third-party developers to more easily deliver online products to devices using the operating system without having users to download any software, said Wang Jian, president of Alibaba Cloud Computing.

"The business model on the Web is already established," he said during an interview with journalists. "If you can bring the Web on to the phone, you can basically bring that business model on to the phone."

The Aliyun OS comes with 20 "Cloud apps" that access Alibaba company services over the Internet. The apps include Internet search, a barcode scanner to find products online and an app listing group-buying discounts. Alibaba plans to bring one new Cloud app to the OS each day.

The operating system also provides each user with 100GB of virtual data storage over the Internet. Photos, contact lists and messages can all be saved in a user's online account.

Alibaba Group includes companies such as Taobao Mall and Taobao Marketplace, two of China's largest online retailers. Taobao users numbered more than 370 million at the end of 2010.

Alibaba partnered with Chinese handset manufacturer Tianyu and chip maker Nvidia to build the first smartphone using the Aliyun OS. The device is called the K-Touch Cloud-Smart Phone W700, and features a 3.8-inch touchscreen with a Nvidia Tegra 2 1GHz dual-core processor.

Tianyu wanted to build a phone that could compete with Apple's iPhone, said company chairwoman Rong Xiuli during a product unveiling on Thursday.

Alibaba Cloud Computing developed the new operating system over a three-year period, with 1,200 engineers. The company is licensing the new operating system for free and is in talks with mobile phone chip-maker Qualcomm to build a lower-end smartphone using the Aliyun OS.

The smartphone could also be sold outside of China if Tianyu chooses to do so, Wang said. The Aliyun OS is being built to support multiple languages, including English.

Increasingly, more Chinese tech companies are promoting their products and services through mobile handsets. One of Alibaba Group's companies, Taobao, previously launched a handset with its own brand that came pre-installed with with its e-commerce applications.

The trend is happening as more Chinese users rely on handsets to go online. The country already has more than 900 million mobile phone users. This year, China is forecast to sell an estimated 95 million smartphone units, according to Beijing-based research firm Analysys International.

Smartphones running Google's Android have experienced rapid growth in China, with total units in use increasing in 2010 from 87,000 to almost 11 million. Apple's iPhone 4 has also been a huge hit in the country, attracting long lines outside of retail outlets in Beijing and creating supply shortages.

Alibaba, however, believes it can still attract users to buy phones using its operating system, noting that the company's products are built for Chinese users. "As long as we have a way to bring the Web services easily, that basically means you can provide a very local experience and service," Wang said.

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