Apple is being tipped to introduce a much anticipated update that brings support for search services from China’s Baidu into iOS next month, according to Chinese reports that cite comment from Baidu staff.

As we wrote in March, the two firms are said to have been testing the integration to put the Chinese search giant — which accounts for 83.6 percent of the local market — at the finger tips of iOS device owners in China. Now a Sina Tech report — via MIC Gadget — states that a software update that brings the addition will be forthcoming.

The date is said to have been revealed by a Baidu product manager who, speaking at a company event last week, disclosed that the firm had finalised an agreement with Apple to introduce the integration.

The move is a logical one for both parties, given that Baidu is so dominant in China’s search space and Apple’s sales in China are going from strength to strength.

A tie-up will give Baidu a greater share of the country’s iPhone users — who are the most active on China’s mobile Web — while strengthening the local appeal of Apple’s mobile products.

The company recorded profits of $7.9 billion from China alone during the first quarter of 2012, and a Woori report this week found its smartphone market share to have more than doubled to reach 16 percent, thanks to iPhone 4S sales during the period.

The move would see Apple take another step away from its dependence on Google. The recently launched iPhoto for iOS, which does not rely on Google Maps, being a prime example of the route it is pursuing; Apple is also working with Microsoft’s Bing and WolframAlpha for search services.

China remains a hugely significant market for Google, despite the latter relocating its search engine in Hong Kong in 2008. Its Android devices are dominating smartphone sales, accounting for 68 percent of new purchases in the final quarter of 2012, according to Analysys.

Baidu began the year with a focus on developing its mobile strategy and the additional of native iOS support would represent a significant coup, that goes in hand with its new cloud-centric platform ‘Baidu Cloud’.

The ‘forked’ Android OS is aimed at providing Baidu’s services to mainstream mobile users.

Baidu says the OS will help manufacturers build sub-$150 devices — starting with the Changhong H5018 – and a stronger presence on the high-end iPhone will compliment this focus on affordable smartphones.

Apple has already begun localising its key products in China, its ‘Mountain Lion’ OS includes support for QQ, Baidu, Sina Weibo, Youku and Tudou among others.

We’ve reached out to Apple and Baidu for comment and will update this post with any new information that we are given.

Update: A Baidu representative told us that the company “can’t comment on rumour”, Apple is yet to respond to our request for comment.

China Telecom has launched a UK mobile service this week, just in time for the upcoming  Olympic Games in London, and revealed plans to expand its operations to other key European markets in the coming months.

In partnership with Everything Everywhere — the joint operation between T-Mobile and Orange — and European MVNO-enabler Transatel, it has launched CTExcelbiz, a pre-pay service that caters specifically for Chinese people in the UK.

The service is the first Chinese MVNO (mobile virtual network operator) outside of China. It runs on the Everything Everywhere network and will give customers access to the UK’s widest 3G network, in addition to speedier 3.5 G (HSPA+) services.

China Telecom Europe — which is the carrier’s brand across the continent — believes that the service will appeal to a range of expatriated Chinese, from students to business users and tourists.

Benefits of the service include Chinese language voicemail and dual English-Chinese customer service, in addition to what the company calls “competitive” pre-pay bundles and free calls between CTExcelbiz customers.

More is coming soon, and the company reveals it will add a number of other features including local Chinese numbers — to allow cheaper calling with friends and family overseas — and a pan-network chat application, though it remains unclear what advantages this would have other existing chat services and social networks.

Yan Ou, managing director of China Telecom Europe, said that the service will offer something new for expatriated Chinese in the UK: “We are very excited to launch the CTExcelbiz brand into the UK, and offer the Chinese population here services that have not been available to them before.”

Yan also revealed that the company would “launch in other European markets over the coming months.”

The UK is estimated to have more than 270,000 Chinese residents, but holidaymakers are an equally important target. Chinese tourist numbers rose 23 percent to number 110,000 in 2010, and the upcoming summer Olympics in London is expected to attract 170,000 visitors from the Asian country.

Elsewhere in the world, China Telecom is already active in the US, where it is aiming to offer dual US-Chinese phone numbers. The firm’s president for the America’s revealed that it would like to run its own US infrastructure one day, but current US security concerns make such a move unlikely for now.

The Chinese government has confirmed that the country now has more than 1 billion mobile phone users, after revealing that the first quarter of the year saw an additional 43 million devices added.

As Tech In Asia reveals – citing a Chinese language report from Sina Tech — the Ministry of Industry and Information Technology (MIIT) has announced that number of active devices in the country has reached 1,030,052,000, thanks to new activations in the first quarter of 2012.

While the bulk of those mobile devices are feature phones, China’s smartphone market has risen to become the world’s largest, based on both shipment volumes and device activations.

Smartphone ownership is growing rapidly, thanks to a surge in sales of Android-based phones — which accounted for 68 percent of smartphone sales at the end of 2011, Analysys says — and it’s clear that there is plenty of scope for app-centric devices to hold a more sizeable share of China’s total mobile market.

Apple is also posting strong growth in China, with a recent report claiming that its market share more than doubled to hit 16 percent. Microsoft, Nokia, Intel and a series of others are also sweet on the Chinese opportunity and have launched, or are launching there.

The Western powers are being challenged by a number of Chinese firms that are focused on providing quality but affordable mid- and low-end devices.

Two of those include Xiaomi, which is already seeing strong demand for its $320 smartphone, and search giant Baidu, which recently unveiled Baidu Cloud platform. A cloud-centric ‘fork’ of Android’s mobile operating system, the company says Baidu Cloud will help manufacturers develop sub-$150 handsets, the first of which will be the Foxconn-made Changhong H5018.

If you’re looking for comparison, the country was revealed to have passed 500 million Internet users back in January.

China may be the world’s fastest growing smartphone market but the country’s growing app space is a very different one to that of North America, Europe and other Western markets.

Android is the dominant smartphone operating system (OS) in the country, accounting 68 percent of smartphone sales in the final quarter of 2012, yet the Google Play store is a much less frequented destination for device owners there than might be expected.

The search provider’s much publicised issues in China — which saw it relocate its search engine to Hong Kong in 2010 — have had repercussions on its Google Play app store. The service is not blocked in China, despite an outage in October, but censorship issues mean that it contains only free apps, with developers preferring to publish and market their offerings elsewhere.

This gap leaves China’s app space looking like no other, with a series of other firms stepping in to aim at the huge demand, providing apps for Android, iOS and other platforms away from the official channels. That’s significant for more than just financial reasons, as Google, Apple and others would prefer to have more control over the apps that customers are loading into their devices, with malware one concern for third-party app stores.

In contrast to Google-Android, Apple is very much in the hunt for China’s app market, which Analysys estimates to be worth $35 billion, Bloomberg reports. The Cupertino-based company opened its App Store to local payments in China last year, and that has contributed to its significant profits in the country.

However, culturally, Chinese smartphone users are inclined to turn to other sources, despite local App Store support. The remainder of the competition comes from operators, fronted by China Mobile, the behemoth that has more than 660 million subscribers, more than any other mobile operator in the world.

As we revealed in January, the ‘Mobile Market’ app store has more than 149 million registered users, who make 30 million downloads each month. Last year, the store’s revenue hit $3.6 million (23 million yuan).

That figure is growing but the traffic it generates is equally as important, China Mobile CEO Li Yue told Bloomberg:

The reason we care about this business is that it can help drive or promote our other businesses. If a developer makes a very good app, then it will help boost traffic on our network and help our growth that way.

While China Mobile has reach, its 68,663 app strong store doesn’t have anything like the same scale as Apple – which has more than 560,000.

Fellow operators China Unicom and China Telecom also run their own app stores which, in addition to third party offerings — such as 91 mobile — gives the Chinese industry a very different outlook to Western markets.

The first analyst data evaluating China’s smartphone industry in Q1 2012 is out, with Apple reported to have more than doubled its market share, according data from Woori Investment and Securities, reported by Yonhap.

Woori’s report concludes that Apple’s sales between January and March 2012 hit 6.2 million devices, up from 2.1 million units the previous quarter. This increase of almost 200 percent is said to have seen Apple’s market share shoot up from 8 percent to 19 percent, thanks to the launch of the iPhone 4S, which was introduced amidst chaotic scenes in January.

The report notes that impressive sales of the new smartphone — which is being offered by two telecom operators for the first time — still leave Apple significantly behind Samsung, after the Korean giant’s quarterly sales hit 9 million, up from 6.7 million at the end of 2011.

Those figures, Woori estimates, would extend Samsung’s market share to 28 percent (up 4 percent), putting it significantly ahead of the rest of the pack in the world’s largest smartphone market.

The firm reports that smartphone sales are continuing at a brisk pace in China, having increased by 156 percent year-on-year to account for 32 million sales during the first quarter of 2012.

However, there is still plenty of scope to develop as smartphones account for just 30 percent of total handsets sales in the country, according to Woori.

Apple doesn’t break down its sales data via markets so it is difficult to give definitive statistics or a clear indication of its progress, but the findings are significant.

Referring to 2011 smartphone sales figures from Analysys, as other analyst reports for 2012 are yet to be published, the 16 percent overall market share is far greater a share than the portion of sales that Apple enjoyed at any point last year – which peaked at 7.1 percent of new device sales in the second quarter.

The Woori data certainly pours cold water on claims that sales of Windows Phone 7 devices have seen Microsoft overtake Apple in the country.

Microsoft backed away from media reports — which originated from comments attributed to Michel van der Bel, its COO for Greater China — providing a non-committal statement which suggested that there had been a miscommunication.

Apple could extend its reach further still in China if it is able to partner with China Mobile and get a share of the operator’s 660 million plus customers. The pair are reported to be in talks over a deal to carry the device but, given the longevity of negotiations and compatability issues, any agreement would likely come around the launch of the next version of the iPhone, at the earliest.

As it stands, iPhones are incompatible with the operator’s 3G network, but still more than 15 million subscribers use the smartphone on China Mobile’s 2G network.

Apple’s recently repored quarterly revenues of $39.2 billion with a net profit of $11.6 billion. The firm disclosed that it sold 35.1 million iPhones and 11.8 million iPads during the three month period.

Microsoft is keeping quiet on reports suggesting that brisk sales of Windows Phone 7-based devices in China have propelled its overall market share up to seven percent, taking it past rival Apple’s six percent in the process.

CNET and a number of other tech sites published comments attributed to Michel van der Bel, Microsoft’s Chief Operating Officer for the Greater China region, who reportedly revealed the statistics to Dutch business magazine Emerce. What’s notable about the original Dutch report, however, is that van der Bel is not directly quoted disclosing the statistics.

Those that are hoping that the facts ring true will need to wait some time as Microsoft’s non-committed response to The Next Web reads:

While we are encouraged by the progress Windows Phone has made since its launch in China two months ago, Microsoft does not give out marketshare information.

The statement is not a denial, but there is very little to be inferred about the legitimacy of the reports, and the source of van der Bel’s alleged figures.

China is the world’s largest handset market — both in terms of shipments and new device activations — so any gain so soon after the Windows Phone launch is a big deal for Microsoft, particularly given that Apple made $7.8 billion in profit from the country during the last quarter alone.

Microsoft launched the Windows Phone 7 platform in China in March, when it revealed it would offer devices from HTC, Nokia, Samsung and ZTE, which include the flagship (and fully localised) Lumia 800C.

Sales of the first batch of WP7 devices were initially reported to be promising, when released via the country’s third largest operator China Telecom.

Data from Analysys International estimates that sales of Windows Mobile devices fell from accounting for 5.2 percent of industry-wide smartphones sales in the first quarter of 2011, to account for just 1.2 percent in the final quarter.

Android led the pack at the end of last year with 68.4 percent of the sector’s sales, ahead of Symbian’s 18.7 percent and Apple’s 5.7, though that was before the latest WP7 devices were introduced.

Apple, Android and Microsoft will soon face new competition after Chinese search giant Baidu threw its hat in the ring with the launch of a new cloud-centric operating system, app store and its first Baidu Cloud-powered device.

Baidu’s aggressive policy, which also includes plans to ‘fork’ Windows Phone and iOS, if possible, will position it as an ideal partner for handset makers seeking a locally appealing device. It remains to be seen if Baidu’s strategy will attract top brands  – beyond launch customer Dell — and steal valuable market share from the competition.

Update: Great to see that our friends at Tech In Asia also chased this report up with Microsoft, smelling a rat with the figures too. Also, as TIA’s Rick Martin notes, TNW did publish a post with details from the original report too – a fact that I was unaware of and inadvertently overlooked in my initial post.

After months of speculation, Yahoo has finally announced that it has agreed to a deal to sell a significant part of its 20 percent stake in Alibaba back to the Chinese ecommerce giant. The agreement also frees the US firm to invest in other ventures in China, should it wish to.

The deal is worth $7.1 billion, composed mostly of stock, and will take place in phased stages over the coming period. The official announcement reveals the removal of restrictions on Yahoo making “other investments” in the country, while clarifying that Alibaba will retain the Yahoo China license:

Among other things, this amendment will result in Yahoo! granting Alibaba a transitional license to continue to operate Yahoo! China under the Yahoo! brand for up to four years, while restrictions on Yahoo!’s ability to make other investments in China will be terminated.

With Yahoo reportedly keen to also offload its stake in Yahoo Japan – its joint venture with operator Softbank — the prospect of further investment in Asia is unlikely and would appear to go against its restructuring.

However, China is attractive to many of overseas companies including Evernote, PayPal, Facebook and even Google, which maintains its presence there despite a high profile withdrawal, so the possibility can’t be entirely dismissed.

A possible Alibaba IPO is also cited within the agreement and such an event would see Yahoo’s ownership decrease further still:

At the time of an initial public offering (IPO) of Alibaba in the future, Alibaba will be required either to repurchase one-quarter of Yahoo!’s current stake at the IPO price or allow Yahoo! to sell those shares in the IPO. Second, following such an IPO, Yahoo! has registration rights and rights to marketing support from Alibaba to enable Yahoo! to dispose of its remaining shares, at times of Yahoo!’s choosing following a customary lock-up period.

Other clauses will see Alibaba make a significant upfront royalty payment of more than half a billion dollars:

Alibaba will make an upfront lump sum royalty payment of US$550 million to Yahoo! and continuing royalty payments for up to four years. In addition, Alibaba will license certain patents to Yahoo.

Yahoo is not leaving its stake involvement entirely and will continue to hold a board seat with voting rights at the Chinese firm.

The struggling US giant has enjoy better fortunes in Asia, although its recent culling of 2,000 jobs has affected its presence in the region it once dominated. Most notably, Yahoo laid off the entire product team behind Koprol — the Asian location-based service it bought in 2010 — leaving its future unclear.

Chinese Internet company Tencent has announced a corporate restructuring move that will see it focus on developing its social network services, mobile offering and overseas presence through dedicated business units.

Tencent posted record earnings this week — with quarterly revenues in excess of $1.5 billion and profits of $466 million — and its reorganisation will see the business split into six verticals: corporate development, interactive entertainment, mobile internet, online media, social network, and technology and engineering.

Additionally, the firm has created an ecommerce subsidiary to manage its online retail business, which includes its struggling Gaopeng joint venture with Groupon, which is rumoured to be merging with rival FTuan.

CEO Pony Ma explained that the move will help the company increase its presence overseas, which already includes a 49.9 percent share in Thai Internet firm Sanook, and focus on its developing its core services:

Our goals are: to strengthen our social networking services, to embrace the expanding global online games market, to extend our presence in mobile Internet, to integrate our online media platforms, to nurture our search business, to build out our e-Commerce platforms, and to enhance our capabilities to incubate new businesses.

The focus is not unexpected as comments made in March revealed that ecommerce, search expansions and global opportunities would occupy the Chinese giant’s plans for the year.

Tencent isn’t alone in its aim to branch out as, earlier this year, Chinese search provider Baidu signalled its focus on nearby Southeast Asia. The company opened a research center in Singapore, as it looks get a better understanding and emerging markets there, and the region is one that Tencent is prioritising too.

Already the company has released its Weixin mobile chat application in Southeast Asia, as it looks to gain a footing in the region’s fast growing mobile market, using a similar approach to its Chinese strategy.

The firm’s QQ messenger is the backbone of its offering in China, and the service has more than 751.9 million active members, the firm’s latest figures published this week revealed. QQ ties into its websites, in a similar way to the vision of Google+, but with far greater effect as QQ was launched before many of the services.

Aside from its Twitter-like Weibo service, Tencent’s other sites games, video and microblogging services, and Weixin — which is known as We Chat in Southeast Asia — looks to be its opening gambit in the new region.

As discussed earlier this week, a move into global markets does not make a lot of sense for Chinese social media firms right now — with plenty of issues at home and little to differentiate them with rivals — but Tencent has a vast array of other services which could appeal to new markets more than its ‘Weibo’ microblogging site.

Ordinarily restructing could mean job loses (a-la Yahoo), but in Tencent’s case new hires are a more likely result. Though for now, Tencent isn’t discussing any recruitment drive.

It’s been less than a week since Evernote unveiled its dedicated Chinese service, but already downloads of standalone Yinxiang Biji app are “off the charts”, according to Troy Malone, the company’s general manager in Asia Pacific.

Ordinarily, Evernote was adding around 4,500 new users per day to its 1.1 million user base in China but, following the launch, downloads there have rocketed. Based on the first week, Malone says that daily new user numbers in China have been greater than its two biggest markets — Japan and the US — combined.

“The US and Japan have traditionally been by far our largest user registrations, but China just eclipsed both of those. It’s like we unlocked a whole new Earth that we didn’t even know existed,” Malone told The Next Web.

At this early stage Evernote is, understandably, not revealing raw user numbers, however Malone is confident that the new service will see it attract new users at higher rates than before, even as the initial burst of interest quietens as the launch effect wears off.

Evernote will continue to offer its US-based service in China, while giving users the option of a more localised experience through Yinxiang Biji, but the company had to make the move in order to realise its potential, according to Malone.

“It got to the stage where we just couldn’t ignore it any longer,” he says, and the new service will provide a faster and more customised service, with the team working with local developers to build bespoke features for Chinese users.

Any move to China brings up security issues, of course, and Evernote CEO Phil Libin recently admitted that the company would likely be unable to stop authorities making legal requests for user data.

Indeed, the blog post announcing the new service contains an important warning for prospective Yinxiang Biji users:

The laws and practices controlling data stored on servers in China are evolving rapidly and Yinxiang Biji will comply with Chinese regulations applicable to the service. This means users of Yinxiang Biji should be aware that Chinese authorities may have the right to access their data according to current regulations.

China is the latest market that Evernote is focusing on but it already has a number of notable successes across Asia, thanks to a policy of scaling early in markets where it sees user growth.

The company has 6 million registered users in Japan, which is serviced by an office of 8. Elsewhere, it has a team of two in South Korea and has just hired a pan-Asia marketing executive who is primarily tasked with helping to build the service across the Greater China region.

China Mobile, the world’s largest mobile telecoms carrier with 650 million subscribers, has confirmed that it is engaged in discussions with Apple to carry the iPhone, but it isn’t likely to be the iPhone 4S.

Past negotiations are believed to have come unstuck around the operator’s desire for a share of App Store profits, while the incompatibility of China Mobile’s 3G (TD-SCDMA) network and the Apple device has complicated the matter too, but China Mobile is buoyant that a deal can be struck.

Reuters reports that new China Mobile chairman Xi Guohua made the disclosure in a shareholders meeting:

We’ve been actively talking to Apple on how we can cooperate. I can’t give you too many details, but I’d like to repeat that both sides do hope to boost our cooperation.

This is not the first time that talks between the two have been revealed as Xi’s predecessor, Wang Jianzhou, previously revealed that the US-based firm had promised to give it an LTE-compatible device, which could be the next version of the smartphone.

Last year Wang said:

We have not yet got [an] agreement [though] Apple promised to provide, when they develop the iPhone for LTE, that it will include TD-LTE. We are discussing the details.

Earlier this year Apple unveiled its latest iPad which supports LTE. The company also quietly launched a revised iPad 2 with enhanced battery life, giving further credence to the rumor that the next iPhone would also support LTE.

Apple has not confirmed when the possible LTE-iPhone would launch, but industry speculation suggests it could arrive in October.

Despite no deal currently existing between the two companies, China Mobile already has more than 15 million iPhone-users on its network. Due to compatibility issues with its 3G service, however, these customers are only able to use its 2G network.

Apple first linked up with China Unicom, before it added China’s third carrier, China Telecom, in March, leaving China Mobile as the country’s sole operator without an iPhone deal.

Snagging a deal with China Mobile could potentially open Apple’s reach in China even further. A recent report from Analysy suggested that the iPhone accounted for 5.7 percent of new smartphone sales in 2011, a number that could masssively increase with China Mobile’s efforts.

Apple is believed to have 21 million active iOS devices — iPad and iPhones — in China, according to Shanghai-based Stenvall Skoeld and Company.