Tencent recently released its long-rumored new Android ROM, reportedly named Tencent OS, or TOS.

When smartphones, especially Android models, were about to explode in China a few years ago, the major Chinese internet companies, including Tencent, Alibaba and Baidu, as well as a number of startups, began to develop custom Android ROMs. They were considered an entry-point product with the big companies’ existing internet services pre-installed, while independent Android ROM developers tried to monetize users from advertising or revenue shares from partner services.

Low replacement rate of existing Android ROMs

In 2012 Tencent rolled out its previous customized Android system TITA. In late 2013 the company made an investment in New York-based Android ROM developer CyanogenMod.

Baidu launched its custom system, Baidu Yun OS, in June 2012, according to its Baidu Baike (a Wikipedia-like site by Baidy) page. Later in the year, media broke the news of Baidu’s acquisition of Dianxin, the Android ROM developer incubated by Innovation Works.

Android ROMs by independent developers emerging over the past few years include Lewa,  MOKEE, ShenduOS, LiGuxNew Bee ROM, and Lidroid, who have tailored products for Chinese users or certain groups of Android phone users.

To making installing Android ROMs easier, the big internet companies such as Tencent and Baidu have acquired or invested in ROM installers and similar tools. But it turns out downloading and installing an Android ROM isn’t popular. Some companies have concluded that the main reason is that regular users are unable or unwilling to replace existing operating systems on their Android phones.

Lezhong OS, a custom Android ROM by the former internet giant Shanda, integrated many of the company’s mobile service, but it shut its online forum in 2012 (source in Chinese).

Alibaba was the first big Chinese internet company to launch a customized smartphone operating system. It claimed Aliyun (or Yun OS), launched in 2011, was a Linux distribution, but Google claimed  it was a forked but incompatible version of the open-source Android system. Alibaba admitted using “some of the Android application framework and tools (open source) merely as a patch to allow Aliyun OS users to enjoy third-party apps” in addition to apps developed in-house. 

Alibaba’s system took a innovative approach by inviting phone makers to adopt its system. The company claimed more than 30 phone brands loaded with Yun OS had shipped a total of 10 million smartphones as of October 2014.

New monetization approach for Android phone makers

Xiaomi, known as an Android phone maker and more recently as a smart hardware brand, started with a custom Android ROM named MIUI, which is pre-loaded on its phones, tablets and smart TVs. Unlike other Android phone brands which developed custom ROMs, such as HTC and Meizu, Xiaomi keeps updating MIUI on a weekly basis and have considered it a major revenue source from day one.

Now the majority of MIUI users (85 million as of November 2014) are Xiaomi mobile device owners. MIUI has been generating income from revenue shares from paid apps, paid theme sales and advertising, amongst others. The app store announced 10 billion downloads as of November 2014 and having shared RMB364 million (about US$60m) to developers in the first ten months of 2014.

Now the MIUI model is regarded as a proven and almost all Android phone makers have followed suit.

When OnePlus, the smartphone startup founded by former OPPO execs, launched its first phone in early 2014, the phone was loaded with CyanogenMod. Before long the company decided to develop a custom system, expected to be released in May 2015.

Smartisan, another new Android phone brand which emerged in 2014, is considering licensing its system to third-party phone makers, its founder and CEO revealed recently.

Some early entrants to the custom Android ROM market have concluded they should partner with phone makers. Baidu invested in Baijia (Chinese for “100 plus”), an Android phone startup founded in April 2013, which is now taking running Baidu Yun OS. Baijia’s founder claimed the system had about 10 million users as of September 2014 (source in Chinese).

It is reported that Tencent has invested more than one phone makers or smartphone related companies, with speculation that its new Android ROM is connected with its latest moves in internet-of-things.

Editing by Mike Cormack (@bucketoftongues)

Tracey Xiang is Beijing, China-based tech writer. Reach her at traceyxiang@gmail.com

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