China’s Alibaba Spins off Aliyun OS With $200 Million Investment

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Posted 5 years ago

Just over a week after feuding with Google over the incapability of the mobile operating system Aliyun, it has been revealed that Chinese ecommerce giant Alibaba is to spin off the OS into a separate business unit, and back the endeavor with a cool $200 million.

In an internal memo picked up and reported on by TechinAsia, Alibaba Group CEO Jack Ma revealed that the Aliyun OS will now be run as a separate business with its own president and chief technology officer, indicating that Alibaba expects big things in the Asian market.

“After two years of hard work mixed with trials, we have seen significant progress in the Aliyun OS business. We have built a strong team and also gained recognition from our business partners. To better safeguard the healthy growth of Aliyun OS business and further implement the [Alibaba] Group’s Aliyun wireless strategy, we need to make adjustments 
in terms of talent, organizational structure and the Group’s resource allocation,” said Ma in his email.

Aliyun was released in 2011 on the Linux platform with the aim of providing a new mobile eco-system in the Chinese market; however, it ran it to trouble last week when Google accused Alibaba of developing an Android variant that incompatible with the Android ecosystem, when it easily could have been made compatible. Taiwanese PC manufacturer Acer found themselves caught right in the middle of this dispute, having planned the release of smartphone running Aliyun. This resulted in Acer’s future as part of the Open Handset Alliance being put under threat and the subsequent scrapping of the handset. That decision means that there are now only two local Chinese manufacturers using the Aliyun OS.

The vast majority of notable smartphone makers are already part of the Android club, which will rule them out of using the Aliyun OS and Alibaba’s dispute with Google is certain to put the frighteners on any other vendors. Android currently has an 81 per cent share of the Chinese market, and Aliyun is going to have a tough time making an impact. Having said that, $200 million investment certainly indicates Alibaba has high hopes for the future. Whether Alibaba decides to go it alone or conform to Android remains to be seen.

– Anthony Carter

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