The R&D team that Peng Shuang, an engineer with Microsoft (China) Co, works on has been very busy recently, as Microsoft aims to combine the team's newly released chatbot Xiaoice (also known as Xiaobing), with artificially intelligent virtual assistant Cortana.

The upcoming combination with Cortana, within two weeks, will enable Xiaoice users to shift between "digital life" and "digital work," Li Di, director of the Microsoft Search Technology Center, told the Global Times Friday.

 "Xiaoice is more like an emotional companion while Xiaona is expected to be an intelligent personal assistant."

Powered by Microsoft's search engine Bing, Cortana, or "Xiaona" in Chinese, which debuted at a developer confab in the US in April, made a grand entrance into China on Wednesday.

Analysts said that Microsoft expects to shake up its tepid mobile Internet business in China with its chatbot roadmap, but localization is a key issue for the US software veteran.

Betting on artificial intelligence

"We believe that this [artificial intelligence] can usher in the next mobile Internet boom," said Li.

Like most other major global Internet companies, such as Google Inc, Microsoft devoted a lot of effort to artificial intelligence, noting in an e-mail to the Global Times that it has been working on this segment and big data collection for over six years.

With five months of preparation, Xiaoice stormed the market quickly by running on China's various established social networking platforms such as Sina Corp's Weibo.

The landing of the two artificial intelligence services in the world's largest smartphone market by shipments appears to be something Microsoft will rely on to attract some of the limelight away from its major rivals - Google and Apple Inc.

"Microsoft expects the growing popularity of Xiaoice and Xiaona to boost consumers' interest in Microsoft's other products like Bing and Windows Phone," Li remarked.

However, Google and Apple have both rolled out similar artificial intelligence functionalities - Google Now and Siri respectively - for mobile devices, signifying challenges for Microsoft.

Data from US-based market research firm IDC showed that Android phones dominated the worldwide market in the first quarter of the year with an 81.1 percent share, while Apple's iPhones followed with 15.2 percent and Windows Phones held only 2.7 percent of the market.

Wang Jun, an industry analyst with Beijing-based consultancy Analysys International, said that features such as Xiaoice and Xiaona can hardly give a big boost to Windows Phone, which has yet to prove itself in a substantial way.

Currently, Xiaoice's monthly active users (MAU) stand at more than 3 million, according to Microsoft's Li.

A bumpy road

However, Xiaoice was supposed to be able to win more fans, if it had been allowed to continue running on Tencent's WeChat, the most popular instant messaging service in China with MAU hitting 396 million by the end of March.

On June 1, scores of Xiaoice chatbots were suddenly removed throughout WeChat, which Tencent said was in response to claims of an emergence of fake Xiaoice and massive user inquiries about concerns over leakage of chat content.

Microsoft refuted this by stating that Xiaoice has adopted a privacy protection mechanism that is stricter than that used by WeChat.

In late June, Xiaoice gradually got revived on other platforms, and the public chatbot spat between the two seemed to have calmed down. But Wang is concerned that this dispute is just a reflection of the tip of Microsoft's localization iceberg.

"The semantic recognition of the Chinese language, which features loose grammatical structure and has various regional dialects, is another big challenge confronting foreign Internet companies during the localization of their intelligent chatbots," Wang told the Global Times Friday.

Li said that Microsoft is fast-tracking the development of its semantic understanding technology, showing confidence in his company's big database, which he believed has helped Xiaoice get a leg up on its competitors. 

However, Yuan Hui, a Shanghai-based chatbot developer, thought that at present, it will be hard for Xiaoice to dominate the Chinese market.

"Xiaoice still needs to further improve its understanding ability of the Chinese language. Now the product is barely satisfactory," Yuan told the Global Times Friday.

For Alex Xu, a 27-year-old Beijing resident, Xiaoice is not appealing. "Like other foreign peers, the robot is not smart enough and can hardly pick up what I say when I use longer sentences," Xu told the Global Times Friday.

He later turned to Xiao Hai, an artificially intelligent chatbot developed by Taiwan-headquartered smartphone maker HTC, saying the latter shows a fairly better interactive ability.

As an example of the difference, when a Sina Weibo user asked Xiao Hai and Xiaoice about the benefit of having a girlfriend, Xiao Hai responded that before having a girlfriend, the asker could save half his salary, but after having a girlfriend, his entire salary would be used up and he would even have to borrow money. In contrast, Xiaoice just responded "It's you," which is a strange response.

Indeed, foreign chatbots have long struggled amid user complaints of misunderstanding what users said or giving irrelevant answers.

For instance, along with the release of iOS6 in 2012, Siri started to support Chinese, but its aural comprehension still has a lot of room to improve at present.

Analysts said that the usage of this function by iPhone owners is also low, citing unappealing functions.

Apple has reportedly planned to open up Siri to third-party app developers, swallowing its pride to fight its way out of the crowded artificial intelligence battleground.

As for Xiaoice, the tie-up with local Internet companies can help offer users more professional online to off-line services, Li from Microsoft believed.

Doing business in China's fiercely competitive market is different, and it is important for companies like Microsoft to actively adjust its attitude and stop "floating slowly in the sky," said Li.

The company is still negotiating with Tencent. "No matter what, we will come back to the WeChat platform," said Li.