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Alibaba Ventures into Connected Cars, Partners SAIC Motor
Alibaba Group Holding Limited (BABA - Free Report) is reportedly teaming up with SAIC Motor to explore the connected car space.
According to a CNBC report, the duo will soon roll out a sports utility vehicle (SUV) called Roewe RX5 powered by Alibaba's operating system YunOS.
The car was unveiled in April at the Beijing Auto Show and its commercial availability is expected in August this year. The commercial model is priced at Rmb148, 000 or $22,000.
YunOS is quite a popular OS in China and is currently in use in some popular Chinese smartphone brands such as Duowei and Meizu. Alibaba claims that YUnOS has the third largest user base after Android and iOS.
A secular decline in PC shipments has started bothering technology giants especially OS and chip makers. With smartphones and tablets replacing PCs at an alarming rate, it is more or less clear that the use of PCs will eventually diminish in the days to come.
ALIBABA GROUP Price
ALIBABA GROUP Price | ALIBABA GROUP Quote
Under such circumstances, autonomous and Internet-based cars are turning out to be a key area of interest for OS and chip makers.
Alphabet Inc. (GOOGL - Free Report) has partnered with South Korea’s Kia Motors to develop Android-based vehicles. Chinese technology company LeEco has also developed an autonomous concept car called the LeSEE.
Apple Inc. (AAPL - Free Report) recently invested $1 billion in Didi Chuxing that is rumored to be a step toward developing a connected car. Baidu, Inc. (BIDU - Free Report) has long partnered with BMW to develop autonomous cars.
So, it would be interesting to see how the competitive atmosphere builds up in China, the world’s largest car market as Alibaba places itself in direct competition with early movers like Apple, Baidu and LeECO.
At present, Alibaba is a Zacks Rank #3 (Hold) stock.
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