Alibaba Group seeks to enter smartphone business, invests US$590 million in Meizu

Alibaba Group has just signaled its intent to be a serious player in the smartphone business by announcing a US$590 million deal in Chinese smartphone maker Meizu.

Alibaba is a Chinese e-commerce company that runs the very popular Taobao sales portal. And in 2014, the company's market share was said to be US$231 billion. Meizu is one of China's top 10 smartphone makers, but trails rivals such as Xiaomi, Lenovo and Huawei by a considerable margin. Its market share for the fourth quarter of 2014 in China was just 2.2%.

The two companies issued a statement saying that this would form a "long-term strategic cooperative partnership." It is believed that Alibaba would provide support to Meizu on the matters of e-commerce, mobile internet, data analysis and payment service. Meizu, on the other hand, would offer its expertise in smartphone operating systems, market strategy and off-line sales.

More importantly, the deal would help Alibaba push its YunOS mobile operating system within China through Meizu smartphones. Alibaba introduced YunOS in 2011, but it has seen little traction.

Source: Reuters

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