China's search giant Baidu releases low-cost smartphone

The new smartphone will compete with a multitude of other low-cost handsets in China

Baidu, China's search giant, has announced the launch of its first smartphone.

It is the firm's first move into the mass smartphone market.

Built by Foxconn, the low-cost Changhong H5018 is powered by Baidu's own mobile operating system, Cloud.

Analysts say it is extremely important for the company to secure significant presence in the booming mobile industry in China, which has the largest number of smartphone users in the world.

The phone will be the first mobile device to run on Baidu's Cloud Smart terminal platform and will come with 100GB of cloud storage on Wangpan, the local equivalent of Dropbox and Google Drive.

With a price tag of less than 1,000 yuan ($158; £99), it will face fierce competition at the Chinese low-end smartphone market.

Customers currently have a choice between low-cost handsets made by firms such as Huawei Technologies, ZTE Corp, HTC, Lenovo and Xiaomi.

But Baidu's director of international communications, Kaiser Kuo, said he believed that H5018 would do well.

Baidu is China's main search engine

"It's a terrific market opportunity for us, and Baidu is constantly adjusting, understanding what users are interested in," Mr Kuo told BBC News.

"The new handset is integrated with the cloud - and with our 100GB offering, I think that no one will be able to match that."

Baidu's mobile OS

Earlier this year, Baidu said it had to develop a stronger presence in China's rapidly expanding mobile space.

With its Cloud Smart terminal platform, it hopes to attract the interest of hardware manufacturers.

"Baidu is recreating itself - we used to be a product-focused company, but now we are becoming a platform-focused company," said Mr Kuo.

It was important for internet companies to secure presence in the mobile industry, said Beijing-based digital media analyst Bill Bishop.

"Mobile internet usage is booming. If Baidu doesn't have a significant presence, they risk challenges to their business, and they [could] miss out on a new frontier," he said.

"That said, they also risk alienating other handset partners who might use them as the search partner, but now see them as competitors."

The new smartphone is primarily aimed at the Chinese market.

"Access to cloud-based services is a critical piece of the technology, and since they are tailored for China, it doesn't make sense to push outside to other markets right now," said Mr Kuo.

With access to Google's search hampered by the Chinese government's internet regulations known as the <link> <caption>Great Firewall of China</caption> <altText>Great Firewall of China</altText> <url href="http://www.bbc.co.uk/news/technology-17910953" platform="highweb"/> </link> , Baidu dominates the country's search traffic.