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Report: Alibaba Looking To Invest In Xiaomi

December 8, 2014 - Written By Kristijan Lucic

China’s smartphone market is getting more interesting by the minute. Xiaomi and Meizu are the two smartphone manufacturers which are expanding at an incredible rate, especially Xiaomi. The two smartphone manufacturers offer high-specced and well-built handset at a rather low price points in China, which makes them more and more popular in the Chinese market and all over Asia for that matter (at least in Xiaomi’s case). Xiaomi even plans expansion to Latin America, India, South-East Asia and Russia in the coming year and in order to do that the company is looking for investors, they need to get a certain amount of money in order to fulfill all of their plans. In comes Alibaba, I bet you didn’t expect this turn of events.

Anyhow, Alibaba, which is mainly an online marketplace company, is trying to do something that I really didn’t expect. Alibaba also dabbles in other things other than online trading, this is a huge corporation actually. You might recall that Alibaba tried to invest in Meizu many times before, the ultimate goal was to take over control over the firm, but Meizu never allowed that. The two companies did manage to agree on a partnership though and Meizu’s operating system (Flyme) is now called “Flyme powered by YunOS”, Alibaba’s operating system. YunOS has the much-needed security platform that Meizu needed and the two companies apparently managed to form a partnership.

Now comes the most interesting part, Alibaba plans to invest in Xiaomi, according to Bloomberg. This is weird on so many levels, not only did Alibaba form a partnership with Meizu, but they’re now trying to invest a huge amount of money in Meizu’s biggest rival, Xiaomi, things are getting really interested in China it seems. Anyhow, Alibaba is trying to approach the smartphone market in a different way in order to gain marketshare. YunOS is a forked version of Android, it is based on AOSP, but it’s not exactly compatible with Android. Google’s Android OS is the main player in China now, no doubt, and Alibaba wants to change that to some extent, at least that’s what the reports are saying.

It will be interesting to see what happens with Alibaba’s Meizu partnership if the company decides to invest a huge amount of cash in Xiaomi. Even acquiring Xiaomi is mentioned in the report, I doubt that will happen considering the pace Xiaomi is growing, but… who knows, Alibaba is now worth more than Facebook for example, so they certainly have the cash to do so. Alibaba could acquire a huge stage in Xiaomi and that could seriously worry Meizu in the end, we’ll see. Anyhow, what do you think about all this, do you think that Alibaba will invest in Xiaomi? Do you think that’s a smart move by the company?