Software maker Microsoft Corp is selling its patents to Chinese device maker Xiaomi, a rare departure for the US Company and part of what the two companies say is the start of a long-term partnership.
The deal which was announced on Wednesday includes a patent cross- licensing arrangement and Commitment by Xiaomi. As a matter of fact, Xiaomi has made its commitment to install copies of Microsoft software on its phones and tablets that will include MS Office and Skype.
Both companies declined to discuss financial terms of the deal.
“This is a very big collaboration agreement between the two companies,” Wang Xiang, senior vice president at Xiaomi, said by telephone ahead of the deal.
“This deal might just give them enough of a patent trove to move to Western markets. Their position in China has been under constant attack from even lower-end Android vendors, so moving overseas is now a necessity” said Sameer Singh, a UK-based analyst.
Even there was a downgrade in shipments of Xiaomi in the first quarter in China, it fell 9% year-on-year. According to Strategy Analytics, its market share dipped to 12% from 13%, squeezed not only by Huawei and Samsung Electronics but also smaller contenders including Oppo and Vivo.
Wang said, “The acquisition of Microsoft patents, which included voice communications, multimedia and cloud computing, on top of some 3,700 patents the Chinese company filed last year, was an important step forward to support our expansion internationally.”