Aliyun OS

Recently, there was quite a bit of drama caused by the cancellation of Acer’s Aliyun OS-based smartphone. Google made it clear that they wouldn’t let Acer release its Chinese-market CloudMobile smartphone. Google’s reason was that Alibaba’s OS was nothing more than an Android fork.

Acer is part of the Open Handset Alliance and, according to the OHA terms, must be committed to a single Android version. This means Acer can’t support forks of Android that are deemed incompatible. Aliyun fell into this category, and so Acer backed down.

In the wake of this event Alibaba is making headlines once again with a surprising announcement that they intend to spin off Aliyun OS. The new company is getting a $200 million investment from Alibaba and is striking out on its own.

While we don’t know for sure, you can almost bet this spin-off has something to do with the recent cancellation of Acer’s Aliyun OS device. Perhaps Alibaba wants to dissociate itself from the Google-Aliyun rivalry?

Here is the memo from Alibaba CEO Jack Ma explaining the move:

After two years of hard work mixed with trials, we have seen significant progress in the Aliyun OS business. We have built a strong team and also gained recognition from our business partners. To better safeguard the healthy growth of Aliyun OS business and further implement the [Alibaba] Group’s Aliyun wireless strategy, we need to make adjustments 
in terms of talent, organizational structure and the Group’s resource allocation.
The management is making the following decisions:
  1. The Aliyun OS business will spin off from Alibaba Cloud Computing [Alicloud/Aliyun] as an independent operation.
  2. Jonathan Lu [Lu Zhaoxi] will be appointed chief data officer and president of the Aliyun OS business; Wang Jian will be appointed chairman and chief technology officer of the Aliyun OS business and will continue to serve concurrently as chief technology officer of Alibaba Group.
  3. The company will invest US$200 million into the Aliyun OS business, to strengthen its talent base, technology, and infrastructure.
Fellow Aliren [Alibaba employees], the company has a lot to strive for and a long way to go. Thank you to everyone that has made contributions to the development of Aliyun OS. I believe that the Aliyun OS business will be better than ever with all your support.

In the memo no single reason for the spin-off was stated, beyond simply growing the business. It could be that this move was planned even before the Acer smartphone cancellation, though I somehow doubt it.

The bigger question is whether Aliyun OS do better on its own or quickly fade into obscurity. What do you think? Does this Android-based fork have a future in the mobile world considering the size and potential of the Chinese mobile market?