Feature Article

August 27, 2012

Chinese Mobile Acquires Major Stake in iFlytek

Anhui USTC iFlytek Co has attracted the attention of telephone giant China Mobile, which just purchased a 15 percent stake in the company for 214 million USD with its voice recognition technology, which has been compared by many to Apple’s personal assistant application Siri. 

Some believe that this acquisition may be an attempt to keep Apple out of the market, which has announced that they will be releasing Siri for Mandarin later this year. Since China Mobile does not have an agreement with Apple, as competitors China Telecom and China Unicom do, this may just be the case. 

It has been noted that iPhone has failed to capture as much of a stronghold in the Chinese market as it has around the world, largely due to China Mobile’s decision not to carry Apple products (or Apple’s decision not to be affiliate with the largest government-backed mobile provider, whichever is the case).

Since China Mobile has government backing it has been suggested that there is more to this acquisition than just keeping up with Apple.  In China, communications are monitored closely by the government, so having control of voice recognition technology could have some unsettling implications.

China Mobile and iFlytek have agreed to enter a strategic partnership agreement to develop applications and products together and that the transaction will be completed by June 30, 2013. According to the agreement, iFlytek will also be welcoming one non-independent China Mobile director to its strategic committee, which makes recommendations on investment and development decisions.

Whether or not China Mobile is using iFlytek for free market purposes to compete with the cell providers who have agreements with Apple or if they are operating under very different motivations remains unclear. Although it is most noted for its Siri-like voice recognition technology, iFlytek is a major developer of Chinese speech and language software and hardware technology.

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Edited by Amanda Ciccatelli

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