handseeing

US technology giant Apple is planning to buy a Chinese online game developer Handseeing Information Technology.

Apple in negotiations with Handseeing

Founded in 2005, Handseeing develops Java-based online games, in partnership with Sun Microsystems, for China's largest social networking forum Tianya Online.

Apple has been in negotiations with the Chinese firm for a certain period of time and an announcement about a deal can be expected in September. The transaction might reach more than $150 million.

Apple's first acquisition in China?

Apple hasn't made any acquisition in China yet. If the deal with Handseeing is successful, it would be the Cupertino, California-based company's first acquisition in the country.

However, other foreign firms are also interested in Handseeing and Apple could face fierce competition. Apple currently sells its popular iPhone through China's mobile operator Unicom. It opened last month a store in Shanghai, the second one in China.

Globally, the popularity of the iPhone and the iPad is largely due to the App Store (225,000 applications ranging from games to business tools are available for download). 

Apple has built its Game Center technology, part of the iOS 4 operating system, as a "new social gaming network" and with Handseeing specializing in online gaming applications, the firm must nicely fit into Apple's business model.

China's online gaming market is soaring

Another reason why Apple wants to acquire Handseeing is because it will help it get a foothold on China's growing online gaming market.

The  total number of online gamers in China is currently estimated at around 80 million or about a fifth of the country's total Internet community (China's online population recently hit 420 million).

However, some analysts wondered why Apple was interested in Handseeing as the Chinese company develops Java-based online games and Apple products currently don't support Java.