Pouring $586 million in Sina Weibo gives Alibaba Group several perks, including an inroad into social media and access to the microblogging platform’s data. Not only that, but its new 18 percent stake in Sina Weibo may also give Alibaba Group a leg-up as it seeks to promote its own smartphone operating system Alibaba Mobile OS (AMOS) as a rival to Android.
As the Wall Street Journal writes, Alibaba Group’s investment in Sina Weibo means that it now has access to data generated by the platform’s 46.2 million daily users. This is on top of the 500 million registered users on Taobao, one of Alibaba Group’s e-commerce sites.
“If you are a big Internet company and you are ambitious enough in the mobile space, you have to do more than apps. Otherwise, you are just a small species in an ecosystem controlled by others,” Alibaba chief strategy officer Zeng Ming told WSJ.
Zeng said that Alibaba Group’s target for AMOS is to power 10 percent of all smartphones shipped in China, an ambitious goal considering that AMOS currently only has 1 percent market share. According to IDC data, Android currently holds an 80 percent chunk of the market, while iOS accounts for 10 percent. Though seven Chinese smartphone makers — KONKA, ZOPO, Amoi, G’Five, Little Pepper, Haier, and Beijing Tianyu–have pledged to launch AMOS phones, none of them are major players.
Obstacles standing in Alibaba Group’s way include Google, which in September objected to Acer’s plan to sell an AMOS-powered smartphone because Acer is part of the Google-led Open Handset Alliance. Google said that Acer could not work with a “noncompatible” version of Android and, even though Alibaba insisted that its OS is not an Android variant, the Acer phone was shelved. But Alibaba Group seems optimistic that it will ll be able to get around the Open Handset Alliance. Zeng told WSJ “if quite a few handset companies decide to choose Alibaba’s OS, Google will have to be careful in how far they want to push it.”
Alibaba Group recently held a press conference in which it outlined its plans to leverage its e-commerce properties to get support from device makers, telecom carriers, and software developers as it creates an ecosystem for AMOS.
Steps Alibaba Group is taking to promote AMOS include subsidies for smartphone makers and a 1 billion RMB ($162 million) funding program for app developers. The company is also striking deals with telecom operators that would allow customers to purchase AMOS smartphones without deposits or down payments by determining their creditworthiness based on transactions on Alibaba Group’s e-commerce sites.
Furthermore, AMOS may stand to benefit from the Chinese government’s push to promote operating systems developed within that country, which has included attacks on foreign developers. For example, in March China’s Ministry of Industry and Information Technology issued a white paper that criticized the country’s dependency on Android, while Apple issued an apology earlier this month after a series of attacks by state-run media. Other OSes currently being developed by Chinese companies include Smartisan and Ubuntu Kylin.