China's Alibaba has taken on established players such as Google and Apple in the mobile operating system market.
It has launched its own operating system, Alyun OS, in a bid to capture the fast-growing Chinese market.
The launch comes as sales of smartphones in China, the world's largest mobile handset market, are expected to grow rapidly.
Alibaba is one of the world's biggest internet conglomerates.
The company said the operating system will feature services such as email, internet search and support web-based applications.
"Mobile users want a more open and convenient mobile operating system (OS), one that allows them to truly enjoy all that the internet has to offer, right in the palm of their hand," said Wang Jian, president of Alibaba Cloud Computing.
"The cloud OS, with its use of cloud-based applications, will provide that," he added.
Alibaba also launched K-Touch, the first smartphone to run the OS. The phone will be manufactured by handset maker Tianyu.
The company said it was also in talks to with phone manufacturers to develop low-end mobile phones that will run the operating system.
However, Alibaba said it has no plans to enter the phone manufacturing sector on its own.
"We shouldn't make a phone. We're not in that ecosystem," said Mr Wang.
He also added that the company is concentrating only on developing the operating system and was not focussing too much on the sales of mobile phones that will use the software.
"We are not responsible for selling the phone, we just provide the system, so there is no hard number," he said.
Alibaba said it plans to launch a tablet PC running on the software by the end of this year.