Alibaba Group announced that Beijing Tianyu Communications Equipment, a Chinese mobile handset maker, will launch a smartphone running Aliyun, the firm’s new operating system, the Financial Times reported. The smartphone is due to be released by the end of July, while a tablet computer with Aliyun will be launched later in the year. Aliyun software features cloud-based email, web search, as well as weather, mapping and GPS navigation services. By using a cloud system and China-based software engineers, Alibaba claims it can both reduce costs and provide a superior product compared with existing operating systems. Aliyun puts Alibaba in direct competition with Apple’s (AAPL.NYSE, APPL.NASDAQ) iOS, Google’s (GOOG.NASDAQ, GGQ1.FWB) Android, Microsoft’s (MSFT.NASDAQ) Windows Phone and Nokia’s (NOK.NYSE, NOA3.FWB) Symbian. China’s 800 million mobile phone users make it the world’s biggest market, but many of those users still have not switched to smartphones.