Alibaba to Offer Smart TV Operating System to Lure More Users

Updated July 23, 2013, 4:20 a.m. ET

Alibaba Joins ‘Smart TV’ Race

‘Smart’ TV Systems Seen as the Next Battleground for Tech Companies

BEIJING—Alibaba Group Holding Co. said on Tuesday it developed a “smart” TV operating system that would allow users to shop and pay their bills via their TVs, and that it would release a set-top box in coming months.

In a news release, the closely held Chinese electronic commerce company said it developed the set-top box with Wasu Media Holding Co. 000156.SZ -1.68% The box will be released in the next few months, said Li Yiqing, Wasu Media’s president and chairman. The two companies didn’t disclose a price.In a statement on its website, Alibaba said other manufacturers have agreed to make TVs incorporating Alibaba’s operating system.

Alibaba, based in Hangzhou, has been exploring broadening its reach beyond its traditional e-commerce base.

Last year it announced a deal with Taiwanese personal computer makerAcer Inc. 2353.TW +2.03% to develop a smartphone based on Alibaba’s Aliyun operating system. Acer halted the release after Google Inc. GOOG +1.57%expressed concerns about the device, saying Aliyun was a version of its Android operating system. Alibaba said Aliyun isn’t part of the Android ecosystem.

Alibaba joins other technology companies such as Google Inc., Samsung ElectronicsCo. 005930.SE +2.28% and Apple Inc. AAPL +0.32% in trying to develop a standard operating system for “smart” TVs that allow users to download apps, movies and surf the Web. But the companies haven’t made much headway due to lack of interest from consumers. Unlike the mobile industry, there are no dominant software platforms for web-connected TVs and the area is seen as the next battleground for major technology giants.

Alibaba to Offer Smart TV Operating System to Lure More Users

Alibaba Group Holding Ltd., China’s largest e-commerce company, has developed a smart television operating system and set-top box to win more users by offering services on a wider spectrum of devices.

Alibaba will make set-top boxes in collaboration with Wasu Media Holding Co. (000156) that will link TVs to the Internet, Yu Ce, vice president of Alibaba, said at a press conference in Beijing today. Some manufacturers will incorporate the operating system, which will include online shopping, and integrate its payment system Alipay in their TVs, Yu said.

Billionaire chairman Jack Ma has expanded lending, secured financing and made acquisitions as Alibaba’s sales surge from services connecting businesses to each other and consumers. The company’s new foray, which aims to combine TV with online shopping, comes as consumers’ living rooms are turning into a major battleground for technology companies this year.

“TVs in the future will not only play videos but also shoulder responsibilities of entertainment and gaming,” said Alex Wang Tingting, a Beijing-based analyst at Internet consulting group iResearch. “This will help Alibaba gain a new access point for more users.”

Gartner Inc. projects that about 85 percent of flat-panel TVs will be Internet-connected smart TVs by 2016. Global production of flat-panel smart TVs will increase to 198 million in 2016 from 69 million in 2012, the Stamford, Connecticut-based market researcher estimates.

Samsung Electronics Co., the world’s largest television maker, acquired Boxee Inc. this month to add connected TV set-top boxes that can record broadcasts and stream online video. Microsoft Corp. (MSFT) and Sony Corp. (6758) are set to release new video-game consoles that emphasize features for streaming and downloading entertainment content.

Many Chinese companies including Lenovo Group Ltd. (992), the world’s second-biggest maker of personal computers, are also expanding to add production of smart TVs. Lenovo said last year it will begin sales of so-called smart televisions that can access the Internet in nine Chinese cities.

To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net; Lulu Yilun Chen in Hong Kong at ychen447@bloomberg.net

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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