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Alibaba makes major mobile push with 1 billion yuan fund

An employee serves a guest at the reception counter inside the headquarters office of Alibaba (China) Technology Co. Ltd on the outskirts of
An employee serves a guest at the reception counter inside the headquarters office of Alibaba (China) Technology Co. Ltd on the outskirts of

SHANGHAI (Reuters) - Alibaba Group said on Monday it will subsidize handset makers that adopt its mobile operating system and will set up a 1 billion yuan ($161.49 million) fund that will dole out incentives for application (app) makers to populate its mobile app ecosystem.

Alibaba launched its own mobile operating system, Aliyun, in 2011 with Beijing Tianyu Communication Equipment Co., but the mobile operating system (OS) has not taken off with handset makers. Last September, a planned launch of a smartphone between Acer Inc and Alibaba was canceled due to what Alibaba said was pressure from Google Inc on the Taiwanese group.

In its renewed push into the mobile sector, Alibaba, China's biggest e-commerce firm, will rebrand Aliyun to Alibaba Mobile Operating System and subsidize handset makers 1 yuan per month for every smartphone they sell that runs on Alibaba's mobile OS, according to the firm's official news blog, Alizila.

Alibaba also announced that five additional handset makers were launching phones with running Alibaba's mobile operating system to be sold through telecom carriers and through Alibaba's online e-commerce platform, Taobao.

The e-commerce firm will also encourage mobile app developers to build apps for its OS through revenue sharing and other incentives that will come from a 1 billion yuan fund, the blog said.

More than 90 percent of China's smartphones run Google's Android mobile operating system. Google's dominance in China's mobile space was singled out by the country's technology ministry last month. A white paper authored by the research arm of China's Ministry of Industry and Information Technology said Google had too much control over China's smartphone industry and had discriminated against some local firms.

(This story corrects paragraph 2 to read Aliyun was launched with Beijing Tianyu Communication Equipment Co, not Haier Electronics Group Co Ltd)

(Reporting by Melanie Lee; editing by Matt Driskill)

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