Amazon’s attempt to enter the mobile market with its own smartphone was a complete failure, one that the company’s Chinese counterpart, Alibaba, has obviously learned from. Rather than entering the mobile market directly, Alibaba has decided to invest $590 million into Chinese smartphone maker Meizu so that it can begin expanding its own mobile operating system.
China’s Alibaba Group Holding Ltd is taking a $590 million stake in an obscure domestic smartphone maker as the e-commerce giant tests ways to expand its mobile operating system in a shrinking, cut-throat handset market. Extending a previously muted push into hardware, Alibaba said on Monday it will buy an unspecified minority stake in smartphone maker Meizu Technology Co. Dwarfed by rivals like Xiaomi Inc [XTC.UL], privately owned Meizu’s slice of China’s smartphone market is estimated by analysts at below 2 percent. The deal, unlike U.S. rival Amazon.com Inc’s foray into smartphones with its own-brand Fire Phone, is designed to help Alibaba push its mobile operating system within China through Meizu’s handsets. In return, Zhuhai, Guangdong-based Meizu will get access to Alibaba’s e-commerce sales channels and other resources, the companies said in a joint statement.