China’s
Alibaba Group Holding Ltd said on Monday it will buy a minority stake
in little-known domestic smartphone maker Meizu Technology Co for $590
million, as the e-commerce giant extends its hardware growth strategy
into mobile devices.
Alibaba,
now worth $213 billion by market value, didn’t disclose how big its
holding will be in a privately owned handset maker that is a distant
rival to much bigger smartphone firms like Xiaomi Inc [XTC.UL]. Based in
Zhuhai, Guangdong, Meizu employs more than 1,000 people, according to
its website.
The
deal will help Alibaba push its mobile operating system within China
through Meizu’s handsets, while giving Meizu access to Alibaba’s
e-commerce sales channels and other resources, the companies said in a
joint statement.
Alibaba
has in the past concentrated on software and services, including its
core e-commerce business. Now, in a move reminiscent of U.S. rival
Amazon.com Inc’s own foray into smartphones with the Fire Phone, the
Meizu investment builds on Alibaba’s more recent efforts to develop in
hardware, like internet TV via set-top boxes.
“The
investment in Meizu represents…an important step in our overall mobile
strategy as we strive to bring users a wider array of mobile offerings
and experiences,” said Wang Jian, Alibaba’s chief technology officer, in
Monday’s statement.
China
is the world’s largest smartphone market, with 557 million people
accessing the internet via mobile devices, according to government data.
But
smartphone sales are flagging. Shipments in China were 389 million
phones in 2014, down from 423 million the previous year, according to
China’s Ministry of Industry and Information Technology.
Meizu
also doesn’t feature among China’s top smartphone brands. The top four
in the fourth quarter of 2014 were Apple Inc, Xiaomi, Samsung
Electronics Co Ltd and Huawei Technologies Co Ltd [HWT.UL], according to
data research firm Canalys.
Posted by : Gizmeon
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