Xiaomi has purchased around 1,500 patents from Microsoft as it continues with its plans to expand outside China.
The move is part of the Chinese smartphone maker's goal of extending its business to Western markets, with one of its major objectives being to sell its products in the U.S.
Microsoft said in a statement Tuesday that the deal will have Xiaomi bundle Microsoft Office and Skype on its Android smartphones and tablets. Xiaomi will also sign a cross-licensing agreement for some other patents with the Redmond, Wash.-based tech giant.
"Expanding the Xiaomi-Microsoft partnership: new deal for Office & Skype pre-install, IP cross-license and patent transfer agreement," Hugo Barra, vice president for Xiaomi's global division, wrote on Twitter.
The major obstacle that Xiaomi has faced in its quest to bring its business to the U.S. has apparently been concerns over patent infringement lawsuits, which analysts say have been used by smartphone vendors to keep competitors out the U.S. market, as seen when Ericsson filed such a lawsuit against the company when it entered India. This new acquisition could help Xiaomi fight back against these lawsuits by building its own patent portfolio.
The deal also comes at a time when the Beijing-based company is starting to spend more on patent licensing, brick-and-mortar stores and advertising as it continues to grow.
The agreement will have the Mi 5, Mi Max, Redmi Note 3 and other Xiaomi Android devices come pre-installed with Microsoft Word, Excel, PowerPoint, Outlook and Skype applications starting in September.
Xiaomi's partnership with Microsoft also expands because of the acquisition, as the former already uses the latter's Azure platform to power its MiCloud service.
Jennifer Crider, a spokeswoman in Microsoft's legal department, noted that the 1,500 patents purchased by Xiaomi represent just a small share of Microsoft's total patents, which amounts to more than 600,000. "We do this periodically," she said.
Wang Xiang, senior vice president of strategic operation at Xiaomi, said in an interview that his company will not focus on sales volume this year and will instead dedicate this time to higher-end products. He did not reveal the exact cost of the deal with Microsoft.
"Both Xiaomi and Microsoft respect intellectual property rights," Wang said. "We believe that with this kind of collaboration and also our commitment for the long-term investment in IP, we are going to build a strong patent portfolio."
