Alibaba – Chop and change

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Corrects yesterday’s post regarding Alibaba’s Yun OS.

  • Yesterday’s Radio Free Mobile blog post incorrectly claimed that Alibaba had stated that it had ceased updating its user experience on Android.
  • Both Baidu and Alibaba have an in house Android development now referred to as Yun OS.
  • It is Baidu that has stated that it has ceased development of its user experience and not Alibaba.
  • Unfortunately, the similarity in the names caused RFM and a number of other commentators to mix them up.
  • RFM apologies to its readers for any inconvenience caused.
  • This does not change RFM’s opinion that Yun OS is not going to fulfil Alibaba’s requirements and that Alibaba is already considering options to replace Yun OS with something else.
  • In that regard, the opinions expressed in Alibaba – Chop and change (see below) remain unchanged.

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RFM AvatarSmall

 

 

 

 

 

Ubuntu and Sailfish are Alibaba’s most realistic options.

  • It looks very much as if Alibaba’s attempt to build its ecosystem on top of Android has been laid to rest, opening the door to one of the alternative offerings.
  • YunOS is Alibaba’s ecosystem built on top of AOSP (Android Open Source Package) that was launched late in 2011.
  • Originally Acer was going to launch a device, but Google managed to put a stop to that by reminding it that as a Google Mobile Services (GMS) vendor, it had signed an Anti-Fragmentation Agreement (AFA) that prevented it from doing other types of Android.
  • This is a grey area as technically, handset makers are allowed to make other types of Android devices as long as they don’t call them Android.
  • In practice, handset makers who make GMS compliant devices for developed markets are going to have a very hard time making other types of Android devices for the Chinese market.
  • This combined with the inherent difficulties that Alibaba has experienced with Yun OS looks to have forced it to abandon the platform all together.
  • Alibaba has stated that it will stop updating its Android skin for YunOS and that the project is now suspended.
  • The skin is the part of the software that the users see most and stopping its development is a very strong sign that Alibaba has given up on YunOS altogether.
  • I do not for one minute think that Alibaba has given up on the idea of having its own ecosystem but has decided to pursue another strategy.
  • Alibaba has four options in my opinion.
    • First. Make another attempt at creating an ecosystem on Android. Alibaba is likely to encounter all of the same problems again so I can’t see it going here again.
    • Second. Pay Canonical to build an Alibaba ecosystem based on Ubuntu. This is a realistic option and I think that Meizu is already hard at work creating an Ubuntu based device.
    • (RFM thinks that Meizu is now effectively controlled by Alibaba and will be the focal point for Alibaba’s attempts to get its ecosystem on mobile up and running (see here)).
    • This is a viable option but the third party app. ecosystem will have to be built from scratch and if the volumes are huge the fees to Canonical will also be very significant.
    • Third. Sailfish. This is the user experience created by Jolla which came from the Meego development inside of Nokia.
    • This is also a viable option but Alibaba would probably need to buy the company and bring all of the community software development in house.
    • The Alien emulator from Myriad enables Android apps to run on Sailfish but how well it does this in the wild is yet to be seen.
    • Fourth. Tizen. This is the linux based smartphone OS that is championed and effectively controlled by Samsung.
    • The device that Samsung has released has been badly reviewed and I suspect that Alibaba is as keen to avoid Samsung as it is to avoid Google.
  • Firefox from Mozilla is not really an option for Alibaba as it is too low end and Alibaba will never be able to have the control over the code that it needs.
  • This leaves either Sailfish or Ubuntu as the front runners to replace YunOS as Alibaba’s mechanism to distribute its ecosystem through mobile.
  • I suspect that an exclusive alliance with Xiaomi could be a winning strategy but at the moment neither Xiaomi nor Alibaba think that they need each other.
  • With the Chinese ecosystem market likely to stabilise at around 900m users, there is plenty of space for three large ecosystems.
  • However, there are already 5 contenders (Baidu, Alibaba, Tencent, China Mobile and Xiaomi) meaning that at least two are likely to fall by the wayside.
  • I very much doubt that the developed market internet brands (outside of Apple) will get a meaningful foothold in China.
  • China is big enough for Chinese ecosystems to flourish there and not need to go anywhere else.

RICHARD WINDSOR

Richard is founder, owner of research company, Radio Free Mobile. He has 16 years of experience working in sell side equity research. During his 11 year tenure at Nomura Securities, he focused on the equity coverage of the Global Technology sector.

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Firefox from Mozilla I’ve been watching now, and with their $500 high end phones in Japan (http://www.theverge.com/2014/12/23/7440079/fx0-firefox-os-smartphone-specs-release-date-photos) and Panasonic TVs available ($1,000+) this quarter, both of which I saw at Mobile World Congress, they’ve moved into a new segment which means they are realistically the option here for Alibaba.

The code is Open Source too, so Alibaba will have all the control on the code that they need.

If its open source, you cant control the code. the only option is to take the code as it is one day and make it your own. the problem then comes with what one is then oblidged to share back with the community when one ships commercial product. This is why I think that something open source is a more difficult proposition for the Chinese as I think they wish to have full control of the code.

Agreed with the writings above. firefox phones already have official Alibaba apps on their marketplace, i saw at the link at http://firefoxadvices.com/alibaba-aliexpress-app-firefox-phones/ you can see the business relationship in place with these two companies. many online articels in chinese, sorry for my poor English I am from China. but i hear FIREFOX is already talking to Ten Cent.

I am sure that Firefox is already talking to everyone in the Chinese ecosystems but how many of them will bite remains to be seen.

Take your point on TVs and phones in Japan but lets see how many of them sell.

Would YOU buy a Firefox phone for $500 that has no apps and no Digital Life services. I would not.