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Alibaba Bets $590 Million On Becoming Smartphone Player

Posted by samzenpus on from the piece-of-the-pie dept.

An anonymous reader was one of many to note that Alibaba has bought a $590 million minority stake in Chinese smartphone manufacturer Meizu. "China's Alibaba Group Holding Ltd is taking a $590 million stake in an obscure domestic smartphone maker as the e-commerce giant tests ways to expand its mobile operating system in a shrinking, cut-throat handset market. Extending a previously muted push into hardware, Alibaba said on Monday it will buy an unspecified minority stake in smartphone maker Meizu Technology Co. Dwarfed by rivals like Xiaomi Inc, privately owned Meizu's slice of China's smartphone market is estimated by analysts at below 2 percent. The deal, unlike U.S. rival Amazon.com Inc's foray into smartphones with its own-brand Fire Phone, is designed to help Alibaba push its mobile operating system within China through Meizu's handsets. In return, Zhuhai, Guangdong-based Meizu will get access to Alibaba's e-commerce sales channels and other resources, the companies said in a joint statement."

19 of 50 comments (clear)

  1. Yeah! by Greyfox · · Score: 2, Funny

    You can already get the highest quality iPlones on alibaba. They look like an iPhone, but they're not. They're probably made by the same guys and the same high-quality tears of Chinese children, though!

    --

    I'm trying to teach myself to set people on fire with my mind... Is it hot in here?

  2. Meizu isn't obscure by Anonymous Coward · · Score: 1

    Meizu isn't considered an "obscure domestic smartphone maker" neither in China nor by anyone buying chinese android phones.

  3. Alibaba by Anonymous Coward · · Score: 2, Interesting

    What is interesting about Alibaba is the opportunities to buy directly from the manufacturers by the common man. If you look on their website you see shirts that normally retail for $70-$80 selling for $8 with FREE shipping. Sure, you can call them "fakes", but they are made in the same factory by the same workers as the "real ones". Who do you think is manufacturing the "real" goods? Santas' Elves?

    Now we know how much we are getting screwed paying 1000% markups.

    1. Re:Alibaba by Wootery · · Score: 1

      you can call them "fakes", but they are made in the same factory by the same workers as the "real ones"

      But are they the same device?

      A single factory and workforce might produce any number of different products.

    2. Re:Alibaba by ArcadeMan · · Score: 2

      Look at this on eBay.

      Those are sold listings with free shipping.

      In Canada I couldn't even get a stamp for a postcard or letter at that price.

      --
      Get free satoshi (Bitcoin) and Dogecoins
    3. Re:Alibaba by Lumpy · · Score: 1

      As well as the opportunities to scam the hell out of people. I have more problems on AliBaba than ebay with scammers.

      They dont have any system in place to filter out the criminals, so it's a giant freaking mess.

      --
      Do not look at laser with remaining good eye.
    4. Re:Alibaba by gtall · · Score: 1

      Yes, but this is Chinese manufacturing we're talking about with no American company worried about their image and quality control. I very much doubt any Chinese knockoff is going to be as good, they'll cut corners anyway they can.

    5. Re:Alibaba by tlhIngan · · Score: 1

      What is interesting about Alibaba is the opportunities to buy directly from the manufacturers by the common man. If you look on their website you see shirts that normally retail for $70-$80 selling for $8 with FREE shipping. Sure, you can call them "fakes", but they are made in the same factory by the same workers as the "real ones". Who do you think is manufacturing the "real" goods? Santas' Elves?

      Now we know how much we are getting screwed paying 1000% markups.

      Only if you don't know how Chinese manufacturing REALLY works. You know, stuff like third shift manufacturing, clones, and fakes.

      Third shift - the same manufacturing line makes more product than requested. So if the company asks to make 10,000 widgets, the factory will make 12,000. Of course, the company would notice needing 20% more parts and supplies, so the extra 2,000 are Chinese-sourced "substitutes". The company get 10,000, and the 2,000 are lower quality parts - using cheaper caps, underspec'd parts, leftover wire and thinner materials. The packaging will usually be identical since running 12,000 copies off the same press is easy. Inner packaging will often be missing since who wants to spend $20 for the 2,000 extra pieces of packaging? $10 worth of bubble wrap ought to be sufficient.

      These are then sold at cheap prices, where unsuspecting buyers don't realize they're not only getting shoddily-made stuff. I mean, that power bar rated at 15A doesn't need to use 14ga wire, right? We have plenty of 24ga hookup wire lying around as scrap, so let's use that! (And I'm being generous, I've seen ones using 30ga or thinner "rated" at 13-15A - if you remember how thin the wires were in a ribbon PATA cable, think using that for a power bar).

      Then there are the fakes where they use whatever parts they can find and wire them together. Then stamp the manufacturer's mark on them. Sort of like what happened to those fake FTDI and Prolific USB-serial chips that entered general distribution. Or those "8GB" flash cards that only have 1GB of actual storage on them.

      Then there's the group of people who take rejected parts and wire them up and hope no one notices - like perhaps a chip failed thermal testing - it still works, but only if you keep it under 40C or something. Those rejects usually get discarded, but smart ones will recycle them and use them elsewhere, maybe even a third shift product. Imagine powering up your server only to have it die under load because the part (which was rejected) failed and you have a copycat item.

      Of course, for stuff like T-Shirts and stuff, or clothing in general, it should be obvious what the markup is. I mean, go into any expensive shop district and look at the stores there - almost all are clothing stores. Very few stores can afford to pay those high prices. So that $100 shirt really does cost $1 to make - that $99 is used to pay the $20,000 monthly leases on those high end district stores.

      About the only other kind of store is Apple, who earn anywhere from $2000-4000/square feet (approximately twice that of Tiffany's). And only through that could Apple even afford to make those kinds of locations profitable.

  4. Obscure... by frinkster · · Score: 1

    taking a $590 million stake in an obscure

    I wouldn't mind being an "obscure" company if $590 million didn't buy the whole thing.

  5. well... by Mirar · · Score: 1

    ...it will have 500,000Ah battery, 19200x10800 resolution with 20,000 lumen screen brightness, 64TB RAM and gold plated.

    As everything else on Alibaba.

    1. Re:well... by Lumpy · · Score: 2

      And it will have happy fun. Always with the happy fun good!

      --
      Do not look at laser with remaining good eye.
    2. Re:well... by Racemaniac · · Score: 1

      and most importantly: free shipping.

  6. Meizu MX4 by hsa · · Score: 1

    One of the first Ubuntu phones. It did make it to the front page of slashdot, but apparently the editors have hard time remembering what they wrote..

  7. The next Radio Shack? by Gim+Tom · · Score: 1

    Guess they didn't notice what happened to Radio Shack after they morphed into a cell phone store.

  8. They used to make mp3 players by quantaman · · Score: 2

    A few years back I needed a compact Linux compatible mp3/ogg player and I bought one of their M3 music cards.

    It was actually a decent little player, I probably would have bought a second after it died but they discontinued them so I switched to a SanDisk clip.

    Still they were definitely trying to emulate the Apple aesthetic even back then, I was kinda surprised they weren't bigger.

    --
    I stole this Sig
  9. Re:Shazam! by gtall · · Score: 1

    Well gollllllly, Sargent, I didn't mean to, but they asked real nice.

  10. Alibaba has ALWAYS sold cell phones by voss · · Score: 1

    Just not their own brand.

  11. Yeah precisely by aliquis · · Score: 1

    Yeah, maybe comparing them to Rio is exaggerating but back in the late mp3-/media player days they was up there with Cowon/iAudio, iRiver and Sansa Clip as one of the finest you could get.

    And then they decided to make an iPhone clone next.

    I assume we're many outside of China who know who they are (and that there phones haven't been as successful, but I assume money and volumes can help with that.)

  12. Re: Meizu is junk by HornWumpus · · Score: 1

    Is Dell suing them for stealing their business model?

    --
    John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'