Opinion | Mobile: Easou, UC talk merger, Xiaomi grows
A potential tie-up between Easou and UC Mobile could create a major new mobile search player, while Xiaomi could have trouble meeting its aggressive 2013 smartphone sales target.
The mobile Internet is buzzing today with a couple of interesting news bits, including one that could see an emerging new giant forming with talk of a potential merger between search site operator Easou and UC Mobile, maker of a popular mobile web browser. Meantime, other media reports say up-and-comer Xiaomi aims to double its sales this year, as it looks to move from niche player to a more mainstream maker of lower-cost, high performance smartphones.
All of this shows that the mobile Internet is shaping up as one of China's most dynamic high-tech areas, as both service and hardware providers jockey for position in an area that is likely to eventually equal or even overtake traditional desktop web surfing. What's particularly exciting in this case is that there are no clear early leaders in this space, meaning we could see some interesting new names come in to grab a major piece of the market.
It's not really clear from the reports what was being considered, if such a meeting really did occur. It's quite possible that other forms of tie-up besides an outright merger may have been discussed. I suspect the talks are probably still in relatively preliminary stage, though the participation of Easou's CEO would indicate that perhaps they are past the exploratory phase.
From my perspective, the most interesting element in this story is that both Easou and UC Mobile are frequently mentioned as exciting, dynamic companies in their respective areas. UC Mobile has been frequently mentioned as a potential merger partner, and is reportedly looking for the right company to leverage its popular mobile browser. Meantime, Easou was the market leader in mobile search in the middle of last year, with 35.5 per cent of the market. Desktop search leader Baidu (Nasdaq: BIDU) was close behind with 33.8 per cent, followed by Tencent's (0700.HK) Soso search engine with 25.8 per cent.
The fact that a startup like Easou had the biggest share underscores that the mobile Internet is still a very competitive area with no clear leader. Accordingly, a tie-up or merger between Easou and UC Mobile could create a very compelling company that could easily emerge as the leader over both Baidu and Tencent in the mobile Internet space.