Alibaba Group Plans To Make Large Investments on Chinese Smartphone Maker Meizu

Alibaba Group Holding Ltd. has agreed to invest $590 million in smartphone maker Meizu Technology Co., boosting the e-commerce company's push to get its mobile operating system on millions of handsets in China.

Asia's largest Internet company will hold a minority stake in Meizu and integrate the smartphone's hardware with Alibaba's YunOS software, Alibaba said in an e-mailed statement Monday. Meizu, which last year released the MX4 and Meizu Blue Charm, didn't rank among China's top five smartphone manufacturers as of the September quarter, according to researcher Canalys.

Alibaba is counting on YunOS to help it grow beyond selling clothes and gadgets into the entertainment and health-care fields as it tries to capture a greater share of China's 557 million smartphone users. With a market value of $211 billion, Alibaba has struggled to expand the software's reach in China, where more than nine out of 10 mobile devices run Google Inc.'s Android software.

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Alibaba Vice Chairman Joseph Tsai said in November that the Hangzhou, China-based company's long-term goal was to get YunOS on tens of millions of smartphones. That aim dovetails with the Chinese government's goals of reducing dependence on Android and promoting national technology champions to rival U.S. giants Google and Apple Inc.

"The investment in Meizu represents a significant expansion of the Alibaba Group ecosystem and an important step in our overall mobile strategy," Wang Jian, Alibaba's chief technology officer, said in the statement. The size of Alibaba's share of the company wasn't disclosed.