Tencent is the latest to enter the mobile technology industry. (Photo : Reuters)
The mobile technology segment will be seeing tougher competition as Chinese Internet giants, Alibaba Group Holding Ltd. and Tencent Holdings Ltd., intensify their efforts to get into the market’s lead positions.
The mobile game covers mobile operating systems and application distribution.
Tencent, a leading social network and online game company, recently announced that it will be launching a trial version of Tencent OS next week. The system will be the firm's own version of Google Inc.'s Android operating system.
Earlier this month, Alibaba announced that it will be buying a minority stake in Meizu Technology Co. for 3.7 billion yuan ($590 million). With the move, Alibaba and the handset maker company will be collaborating to enhance the already existing mobile operating system of the e-commerce giant.
In China, Google services such as Play, Maps and Search are blocked. Hence, the very open and lucrative market for mobile game players.
The absence of a fierce competition such as Google lures companies to enter the segment. Once controlled, the mobile software and a distribution business could give the investing firms a significant increase in revenue.
For Chinese tech firms, developing their own Android-based system is tantamount to providing the market with Google-like services, which are very in demand in today's modern generation.
According to Tony Chu, a portfolio manager for U.S. fund management firm RS Investments, "the critical thing is who controls the gateway for mobile traffic," pointing to the operating system as a key in grabbing the lead position in this market.
RS Investments is known for buying a 156.6 billion yuan ($25 billion) worth of shares in Alibaba last year.
