This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Chinese Smartphone Upstarts 'no Threat' to Google


By the Financial Times ( Financial Times) -- The success of Google's Android operating system in China is not under threat from a host of mobile operating systems being unleashed on the mainland as they will be "niche" products, according to a senior industry executive.

Over the past few months, Chinese groups including Alibaba, Baidu and Tencent have been moving into an area dominated by the U.S. group's Android platform, raising questions about what that could mean for Google's one big success story in China.

But David Ku, chief financial officer of MediaTek, the world's biggest supplier of chips to Chinese phonemakers, said that phones based on these new operating systems will lack wider appeal as they are designed primarily to draw users towards using one company's services exclusively.

For example, the first phone based on the Aliyun operating system -- a collaboration between Beijing Tianyu Communications and Alibaba -- went on sale in China last month, with an English version of the OS expected in the next few weeks and an Aliyun-based tablet PC by November.

However, although applications made by other developers can run on Alibaba's Aliyun mobile operating system, Aliyun-based phones are designed to encourage users to use Taobao, the group's domestic consumer e-commerce business, on their phones.

"They will definitely be niche market" products, Ku told the Financial Times.

"From an industry perspective, Baidu, Tencent and Alibaba may be competitors," but from the consumers' point of view it is not about choosing just one service to have on their phones, Ku said. By contrast, Android-based phones can run a variety of applications and services from competing providers because Google's operating system is open to all developers.

Unlike in Europe and the U.S., China's mobile market still consists largely of traditional mobile phones running on slower, second-generation networks. While international brands such as Nokia and Motorola initially had great success supplying this market, MediaTek's chips enabled a generation of Chinese phone manufacturers to produce cheaper and often more innovative phones that are now challenging top-tier brands across many emerging markets.

But as the Chinese phone market shifts towards smartphones running on faster, third-generation networks, Google's Android operating system has emerged as a clear favorite because Chinese phonemakers can use Android free of charge. MediaTek's smartphone chips all work with Android, while its chips for traditional mobile phones use the Taiwanese company's own operating system.

Analysts generally agree with Ku in that the new operating systems will have a tough time gaining mass adoption. "If you look at all the major Chinese manufacturers now they are all making genuine Android-based phones," said CK Cheng, analyst at CLSA.

null

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $124.10 -0.11%
FB $83.60 0.71%
GOOG $551.50 -0.66%
YHOO $45.10 1.42%
TSLA $185.79 -2.40%

Markets

DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs