Chinese eCommerce Giant Alibaba Invests $590 Million in Smartphone Maker Meizu
When it comes to online retail in China, Amazon is a distant runner up to the bevy of ecommerce sites owned by Alibaba, and now the two will be competing even more fiercely in smartphones.
On Sunday Alibaba announced a $590 million investment in Chinese phone-maker Meizu. The terms of the deal were not disclosed (other than that it was a minority investment), but the press release does hint that the two companies "will collaborate at both strategic and business levels to achieve a deeper integration of Meizu’s hardware and Alibaba Group’s mobile operating system", suggesting that Meizu’s will soon be producing more phones running Alibaba’s Yun OS.
Alibaba had launched Aliyun OS, aka Yun OS, 4 years ago. It’s based on Android, but like Xiaomi’s Miui OS or Amazon’s Fire OS, Yun OS is designed to be independent of Google’s control. Yun OS can be found on smartphones and smart TVs, including some phones produced by Meizu.
Neither company is doing all that well in smartphones. Meizu sold only 1.5 million of its Android-based smartphones in January, and even fewer phones run Yun OS. Even though Alibaba has been promoting it for the past several years, it has yet to bear fruit.
The closest it got to real market success was back in 2012 when Acer announced plans to ship a phone running Aliyun OS, but that was scuttled after Google applied pressure with the threat that Acer would lose access to the official Google version of Android (which to this day, still runs on 63% of all Android devices).
images by John.Karakatsanis
jjj February 9, 2015 um 10:52 am
First Amazon is not in second place in China (runner up means second) , at least JD is also ahead of them.
Then Meizu is doing very well,1.5 millionin January is great.
Meizu had a single device per year and that’s why their sales were small. By my estimates (based on almost no info, but i’m good at it) they shipped 6.5 to 7.5 mil units last year.
However last year they changed strategy and they launched the MX4, MX4 Pro, m1 Note (aka Meilan Note) and now in January the m1. (you can figure out price , specs and retail timing for each).
The m1 Note is the best value with 5.5 inch 1080p, 8xA53 at 1.7GHz, 2GB RAM, 16GB NAND , 13Mp and 5MP cams for only 999CNY (160$). the first batch hit retail on Dec 30 and there is little competition with those specs for now. The Xiaomi offering in the price band is way lower specs for example.
The m1 is at 699CNY competing with Xiaomi Redmi 2 but with slightly better specs all around and hit retail in Feb only with 100k a few days ago and 100k today or yesterday.
Meizu sold 1 mil units in Dec and 1.5 in Jan but that’s a 50% growth on month and they might hit 2mil or more in Feb ,depending on supply
Xiaomi used to have 1 model per year and their volumes took off when they added more. Meizu is late ,they are where Xiaomi was 1-2 years ago but they just turned on the nitro (true that in a more competitive market).
So Meizu will go from 6.5-7.5 mil units in 2014 to at least 3 times that in 2015 and that’s without factoring in any aggressive international expansion. We’ll see what happens, what they do, what others do , hard to say this early if they’ll ship 20 mi or they manage to do far better. Xiaomi after all has just betrayed their users and their identity with it’s Note Pro pricing while the updated Redmi (Redmi 2) is a pseudo-update.They might be done with the great prices and if they take their foot off the gas, Meizu will be more than happy to take over.
Meizu is also expanding is external the hardware ecosystem with partnerships for the smart home (Haier) and some more of their own hardware. And their brand is pretty strong.
When it comes to growth they are the hottest phone maker this year (likely followed by Asus) and investing in them is like investing in Xiaomi a while ago. so a very good idea, at a reasonable price ofc. They will be gunning for the big boys,they just need a bit of time to get there
How capable they are of growing up once they gain share,respect their users, shake their Apple fetish, is another conversation.
Nate Hoffelder February 9, 2015 um 11:56 am
I’m probably misusing the word runner up. Thanks for the other details.