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Alibaba Prepares Cloud-Based Mobile OS For Exploding Chinese Market

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It’s hard to imagine that the world needs another mobile operating system, but it may be exactly what China needs. Alibaba’s mobile group is preparing a Web-based mobile operating system for phones and tablets that could give the world’s largest mobile market a homegrown alternative to operating systems designed in the U.S.

The software will be called Allyun OS, according to a report from Reuters, and while it’s based on Google’s Android core it sounds like Allyun will have more in common with Chrome OS, as users won’t have to install applications on the device. However, the Wall Street Journal reported that Allyun phones will be able to run Android apps. The phone will be called the K-Touch Cloud Smartphone, and a tablet is in the works for later this year.

There’s a huge opportunity for mobile companies in China. With 900 million current subscribers (not quite double the number of fixed Internet subscribers as of June) but mostly on voice-only or slow data services, China’s mobile population is hungry for the same types of smartphones that the rest of the world covets. Android (despite Google’s differences with the Chinese government) has made significant inroads at wireless carriers and Apple’s iPhone 5 is widely expected to become available through leading carrier China Mobile after its Chinese debut with China Unicom.

But with so much growth still to come, there’s plenty of time for a China-bred operating system to try and capture the public’s attention. Baidu (NSDQ: BIDU), which is believed to have mobile OS ambitions of its own, successfully competed against Google (NSDQ: GOOG) in search in part by emphasizing its Chinese heritage, and the same tactic could work in the mobile market.