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Six-year-old Chinese smartphone company Xiaomi is buying 1,500 technology patents from Microsoft and will preinstall the Microsoft Office productivity suite and Skype on its Android-based smartphones and tablets under a new partnership deal announced by the two companies.
The deals, which were unveiled on May 31, will bring Xiaomi a wide assortment of patents relating to wireless communications, video, cloud technologies and multimedia, a Microsoft spokesman told eWEEK in an email reply to an inquiry.
“This agreement reflects the deep respect Xiaomi and Microsoft have for intellectual property rights,” the spokesman said. “The companies are committed to a healthy patent system and standing against the abusive practices we’ve seen at times in our industry.”
The companies also will cross-license some of their technologies, according to their joint announcement, but no details of that deal were released.
Under the agreement to install Microsoft Office and Skype on Android smartphones and tablets from Xiaomi, that deal will give mobile users the ability to work, collaborate and communicate using the mobile devices of their choice, the companies said.
“We are excited to be working closely with Microsoft on a broad technology collaboration partnership,” Xiang Wang, a senior vice president at Xiaomi, said in a statement. “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.”
Xiaomi Android devices, including the Mi 5, Mi Max, Mi 4s, Redmi Note 3 and Redmi 3, will come pre-installed with Microsoft Word, Excel, PowerPoint, Outlook and Skype applications starting in September 2016, according to Xiaomi. The offerings may vary by device, market and mobile carrier.
The companies already had a partnership that involved Windows 10 on the Xiaomi Mi Pad and the use of Microsoft Azure to power the Mi Cloud service from Xiaomi, the companies said. Microsoft said that the “partnerships with companies such as Xiaomi are central to Microsoft’s strategy to work with industry leaders around the world to meet the needs of joint customers.”
The expansion of the existing partnership between the two companies is also intriguing as Huawei’s market share of the global smartphone market exceeds that of Microsoft, which is in a decline. In late May, Microsoft announced that it is laying off up to 1,850 workers in its smartphone hardware business as it moves to cut its losses, shrink its sales focus and sell smartphones to enterprise customers who want specialized devices with additional security and manageability features. The company said it will “streamline” its smartphone hardware business and take a fourth quarter impairment and restructuring charge of about $950 million, including about $200 million for severance payments, according to a recent eWEEK story.
Also in May, Microsoft sold its feature phone assets to Foxconn Technology Group’s FIH Mobile Ltd. (FIH) for $350 million, according to an eWEEK report. That deal was related to a 10-year licensing deal that will allow Nokia mobile phones, smartphones and tablets to be built and sold around the world by a newly formed Finnish company, HMD Global.
Xiaomi and other Chinese upstart smartphone companies, such as Huawei, Alcatel and ZTE, don’t come close to leading the U.S. smartphone market, but they are gaining market share around the world at the expense of companies like Microsoft, Lenovo and others due to lower prices, good products and unlocked device flexibility for buyers.
In August 2015, Xiaomi announced a partnership with Taiwan’s Foxconn to try to carve out a bigger piece of the huge consumer handset market in India by assembling phones there to cut costs and simplify distribution, according to an earlier eWEEK report.