Founded in 2010 by the entrepreneur Lei Jun, Xiaomi is one of China’s largest mobile brands, just recently announced a licensing deal of around 1,500 patents from the software-giant Microsoft. Pundits suggest this move is an effort to expand from China into western markets.
Microsoft and Xiaomi broad technology collaboration partnership will provide users built-in Microsoft apps, such as Office or Skype. On the other hand, the patents offered by Microsoft will cover a range of wireless and voice communications, video, cloud computing and multimedia technologies, which will help Xiaomi to increase its patent portfolio.
This patent deal allows Xiaomi to have a stronger position in markets where competitors have secured patent pools, thus greatly reducing this risk of patent litigation, which would block or hamper expansion into regions such as Europe or the U.S. It could also allow development of higher-end products, instead of the current volume of sales approach.
This announcement comes at an important time when Beijing-based Xiaomi faces a slowing revenue growth from increasing domestic competition. Xiaomi fell out of the world’s top five smartphone sellers in the first quarter, after being overtaken by rival Chinese companies, Huawei, Oppo and Vivo, according to market research firm IDC.
Due to this cross-licensing partnership, consumers will find Skype, Word, Excel, PowerPoint, Outlook and Skype pre-loaded on Xiaomi Android devices, including the new Mi 5, Mi Max, Remi Note 3 and Mi 4S, which also goes to show the change in strategy from Seattle’s Microsoft, which is focusing more in cross-platform software and less in hardware development.
The potential win-win long-term partnership also marks an important step in trying to fight piracy and antitrust claims in China, where Microsoft is facing investigation.