Xiaomi to purchase 1,500 patents from Microsoft in partnership deal

Xiaomi has announced it plans to purchase 1,500 patents from Microsoft in a push for international expansion.

The financial terms of the sale have not been disclosed, but both companies are reportedly referring to the deal as a “long-term partnership,” according to Reuters.

The partnership includes a cross-licensing patent arrangement and a pledge by Xiaomi to install copies of Microsoft software such as Office and Skype on mobile devices, including the Mi 5, Mi Max and Redmi Note 3.

Wang Xiang, senior vice-president at Xiaomi, told Reuters the deal marks the beginning of a significant collaboration between the two companies, adding that Microsoft’s 1,500 patents, which include not only wireless communications but other technologies is “an important step forwards to support our expansion internationally.”

Xiaomi’s weak patent protection has been one of the main obstacles holding the company back from entering the U.S. market, an active objective for the Chinese manufacturer. So far, the company has revealed an Android TV set-top box at Google I/O 2016 for the U.S. market, though it’s unclear if it will make its way to Canada. Xiaomi also sells a tablet that runs Microsoft Windows.

There is no set date for Xiaomi mobile devices to launch in the U.S., however, and the company states it still has priorities that top its entry into the American market.

“We are taking the necessary steps for launching in the U.S., but for the time being, the focus remains in India,” said Hugo Barra, vice president of international at Xiaomi, in an interview with The Wall Street Journal.

Xiaomi is likely disappointed in its results in that country so far, having not yet cracked the top five smartphone sellers in India according to IDC. Globally, the OEM has also been sliding. It was pushed out of the IDC’s rankings of the top five overall smartphone sellers in the first quarter of 2016, overtaken by Huawei, Oppo and Vivo.

While this is clearly an important deal for Xiaomi, Microsoft is also touting its significance.

“This is much broader than some of the other partnerships we’ve had,” Microsoft corporate vice-president Jonathan Tinter told the WallStreet Journal.

With more than 60,000 patents held by Microsoft, however, this move doesn’t make a large dent in its intellectual property, and some analysts speculate it was only done to take the edge off the royalties the company collects from OEMs that utilize Android, which uses technology that Microsoft claims it created.

Related reading: Xiaomi says it will be years before it expands to North America or Europe