Microsoft is selling around 1,500 patents to Chinese mobile device maker Xiaomi, which the companies suggest is the beginning of a long-term partnership.
On May 31, the two companies announced the patent cross-licensing agreement. Xiaomi will also start shipping Skype and Microsoft Office in the company's Android tablets and smartphones. Xiaomi has a strong presence in countries such as China and India. Xiaomi customers in these countries will soon enjoy select Microsoft software on their mobile devices.
"We are excited to be working closely with Microsoft on a broad technology collaboration partnership," said Xiang Wang, senior VP at Xiaomi. "As demonstrated by this agreement with Microsoft, Xiaomi is looking to build sustainable, long-term partnerships with global technology leaders, with the ultimate goal of bringing the best user experience to our Mi fans."
Skype is among the most popular video chat and voice call service, and Microsoft Office is one of the most preferred productivity applications in the world. Peggy Johnson, the executive VP of Business Development at Microsoft, says that the partnership will bring the very best of productivity to millions of Xiaomi fans across the globe.
Market analysts suggest that Xiaomi's foray in markets outside China faced obstacles due to weak patent protection. Sameer Singh, an analyst based in the UK, says that the deal with Microsoft will give Xiaomi enough patents for the company's future plans in the Western world.
Singh also noted that Xiaomi's position in China is threatened by other Chinese device makers who are selling tablets and smartphones at a cheaper price. Xiaomi's move outside China has now become a necessity.
According to an International Data Corporation (IDC) report, Xiaomi ranked fifth in the top five smartphone vendors list in the final quarter of 2015. However, 90 percent of the company's mobile phone shipments during the quarter were in China.
Another IDC report highlighted that lesser known handset brands such as Oppo and Vivo had gained traction in the first quarter of 2016. Vivo pushed Xiaomi from the fifth position, and Oppo took the fourth position from Lenovo in the top five smartphone vendors list in Q1 2016.
Xiaomi's deal with Microsoft means that Americans may soon see Xiaomi officially launching smartphones and tablets in the U.S. in the near term.
The latest partnership is a significant step in Xiaomi's international expansion ambitions. However, the company will still face stiff competition from bigwigs such as Samsung, Apple and more.
Photo: Jon Russell | Flickr
