China's Alibaba bolsters mobile OS after clash with Google

Google previously threatened to derail Alibaba Group from signing up handset vendors for its mobile OS

Chinese e-commerce giant Alibaba Group is seeking to revive its mobile operating system, with a new name, new partners and more money, after Google threatened to block the companies from bringing aboard handset vendors for the OS.

The company on Monday announced a push to create an ecosystem around its Alibaba Mobile Operating System (AMOS), formerly known as the Aliyun OS. In addition, five local Chinese handset vendors -- AMOI, G'FIVE, KONKA, Little Pepper, and ZOPO -- are releasing six smartphones installed with the operating system.

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Launched in 2011, Alibaba's Linux-based mobile OS is the company's attempt to carve a presence in China's booming smartphone market. But last September, Alibaba collided with Google over accusations that the fledgling operating system is in fact an Android variant built with incompatibilities. Many of today's top Android handset makers, including Samsung, HTC and Chinese vendors Huawei and ZTE, are thus barred by the Open Handset Alliance from supporting it, even though Alibaba has refuted Google's claims.

The dispute with Google marked a major blow against Alibaba's OS, according to analysts. But the e-commerce giant, best known for its Taobao and Tmall shopping sites in China, is not giving up. On Monday, the company said it would pay handset makers to back its mobile operating system. The company will do this by subsidizing vendors with a monthly 1 yuan (US$0.16) payment for every Alibaba OS handset sold, with the fee ongoing until the phone goes out of use.

To further support its mobile OS, the e-commerce giant has set up a 1 billion yuan (US$160 million) program to help fund developers. Alibaba will also leverage its online retail sites to help vendors sell their handsets directly to consumers, thereby cutting down on warehousing and distribution costs.

Alibaba's mobile OS has yet to gain a major following in China, and previously only had the backing of two local handset vendors, Haier and Tianyu. Last September, Taiwanese PC maker Acer, a more reputable vendor, also planned to release a smartphone using the OS. But the company abruptly canceled the product. This caused Alibaba to accuse Google of threatening to revoke Acer's Android license if it went ahead with the phone's launch.

The next slate of smartphones to use Alibaba's mobile OS also come from local vendors. But five of the six phones will be available under 1,000 yuan, (US$160) when bought without a carrier subsidy, putting them at affordable prices for most Chinese consumers.

China's smartphone market, however, is known for its extreme competition. Excluding big name foreign companies, the nation has about 100 domestic smartphone brands, and the manufacturers favor using Google's Android, according to analysts.

But Chinese authorities recently signaled they may be wary of Android's dominance in the nation. Last month, a whitepaper from a Chinese tech regulator alleged that Google had discriminated against local companies over the use of Android, a possible reference to Alibaba's troubles with the U.S. search giant. The whitepaper, while making no recommendations, suggests China wants to support a homegrown mobile operating system, according to experts.

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Copyright © 2013 IDG Communications, Inc.