Baidu working on wearable Web gadget

Baidu Inc, operator of China's most popular search engine, has developed a prototype for a wearable Internet gadget similar to Google Inc's Glass, in the latest effort by a Chinese company to follow the lead of US tech giants, various industry-news websites in China reported.

Sina.com cited insiders, whom it didn't identify by name, as saying that Baidu has been testing the prototype of a device called Baidu Eye.

Similar to Google Glass eyewear, Baidu Eye has functions such as an LCD display, voice-controlled image recognition and bone-sensing. A user's voice would control functions on the gadget such as making phone calls and doing basic Web searches. The device would also recognize a user's gestures to take and send photos.

The news website QQ.com, part of Chinese online-commerce giant Tencent Holdings Ltd, also said Baidu has been working with Qualcomm Inc to use the US semiconductor maker's technology to extend the life of the Baidu Eye battery to 12 hours.

Baidu representatives weren't immediately available to comment on the reports. Its Nasdaq-traded American depositary shares closed at $87.05 on Monday, down 65 cents.

The Beijing-based company holds a 70 percent share of China's Web-search market and is the second-biggest Internet company in the country by market capitalization ($30.4 billion as of Monday), trailing only Shenzhen-based Tencent.

Baidu, like many other Chinese tech companies, faces the challenge of finding new sources of growth beyond its core business. It has been trying to diversify its business model along the lines of Google and Apple Inc.

The Sina report said Baidu is developing Baidu Eye on an open platform on which developers can to design applications for the device. Baidu plans to outsource manufacturing of the gadget, just as Google is expected to do for Google Glass by contracting with Taiwan-based Foxconn Technology Group, the longtime assembler of Apple's iPhones and iPads.

Foxconn, through its subsidiary Hon Hai Precision Industry Co, has carried out supply contracts with Apple in the Chinese mainland.

However, the Financial Times, citing people familiar with the plans, reported last Wednesday that Google plans to hire Hon Hai to assemble Google Glass headsets at a plant in Santa Clara, California.

Only a few thousand of the headsets will be produced at the California factory in coming weeks, the FT reported, in contrast to the millions of iPhones, iPads and other devices Hon Hai and Foxconn turn out in China.

Also on Wednesday, Google said it would give 8,000 contest winners a chance to buy the gadgets for $1,500 each. No launch date has been disclosed, although speculation is that Google Glass will go on sale sometime this year.

Chang Xiaobing, chairman of China United Network Communications Co, the country's No 2 telecommunications provider and a major partner of Apple, said on Sunday that the number of digital applications downloaded in China was second only to the US. While Apple's iTunes and Google's Android stores are still the dominant players in the Chinese market, domestic app sellers are catching up.

Mobile Internet has also shown momentum in China. There are about 750 million Chinese users with smartphone access to the Internet, and they contributed 360 billion yuan ($58 billion) on data and related services in 2012.

Beyond Google Glass, Apple is said to be developing another type of wearable computing - a watch-like device that will surely grab the attention of Chinese Internet companies, developers and users.