Opportunity Is Calling for Baidu

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Baidu (NAS: BIDU) is diving into the mainstream smartphone market, just as it promised last week.

China's leading search engine unveiled the partners behind the entry-level handsets that will champion its new Baidu Cloud mobile operating system update. Foxconn, Sichuan Changhong Electric, and wireless carrier China Unicom (NYS: CHU) will help the dot-com darling make it happen.

After teaming up with Dell (NAS: DELL) last year to crank out smartphones based on its Baidu Yi mobile operating system, Baidu is going with hometown heroes.


It's a smart move.

China may still be an emerging market, but there are already more smartphone owners in the world's most populous country than the entire U.S. population.

Baidu can't afford to let Western powerhouses Google (NAS: GOOG) and Apple (NAS: AAPL) run away with this market, especially if it may mean shutting Baidu's access to mobile users. Baidu may command 78% of the traditional search market, but it's not as dominant in mobile search.

This isn't necessarily a matter of Google's Android or Apple's iOS funneling searchers elsewhere, but Baidu would prefer to be the company behind the smartphones. It makes it that much easier to make sure that they lean on Baidu's services as well as its popular search engine.

Baidu can use the boost after posting disappointing first-quarter results last month. Baidu Cloud's success as a platform could go a long way toward combating decelerating top-line growth at the slowing speedster.

Bullish on Baidu
A bullish call on Baidu has served me well on Motley Fool CAPS over the years. True to the CAPScall initiative, I'm not going to give up on it now. Baidu has soared 1,390% since I recommended it to Rule Breakers newsletter subscribers six years ago, but now it's time to discover the next rule-breaking multibagger. It's a free report. Want it? Get it.

At the time this article was published The Motley Fool owns shares of Baidu and Google. The Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Dell, Baidu, Apple, and Google. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

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