Acer pulls smartphone launch over Google threats

Google has reportedly threatened to cut ties with consumer electronics maker Acer over its use of a rival smartphone operating system.

Dow Jones Newswire reported that Acer has since canned plans to launch the CloudMobile A800 smartphone this week, which ran the Linux-based Aliyun operating system rather than Google's own system, Android.

According to Chinese company Alibaba, which develops the system, Acer "was notified by Google that if the product runs Aliyun OS, Google will terminate its Android-related cooperation and other technology licensing with our partner".

"We regret Google's action," Alibaba said.

AliCloud, a subsidiary of Alibaba Group, developed the mobile operating system in direct competition with Android for Chinese company Haier's Zing.

"Acer will continue to communicate with Google and the company still wants to launch the new smartphone based on Alibaba software," Dow Jones reported an Acer official as saying.

Alibaba may soon be the world's largest online retailer, with sales reaching approximately $US150 billion ($A142 million) this year, beating out Amazon and Ebay.

Yahoo! currently owns two-fifths of Alibaba, and is expected to sell half its stake next week, for $7.2 billion. The investment in Alibaba was made seven years ago by Yahoo! co-founder Jerry Yang, who stumped up $1 billion when the online retailer started up, but relations between the two have soured since.