SOFTWARE maker Microsoft Corp. is selling about 1,500 of its patents to Chinese device maker Xiaomi, a rare departure for the U.S. company and part of what the two companies say is the start of a long-term partnership.
The deal, announced yesterday, also includes a patent cross-licensing arrangement and a commitment by Xiaomi to install copies of Microsoft software, including Office and Skype, on its phones and tablets. 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.
Analysts said Xiaomi’s ambitions to be a major player outside China were hampered by weak patent protection and a fear of a prolonged legal battle.
“This deal might just give them enough of a patent trove to move to Western markets,” said Sameer Singh, a U.K.-based analyst. “Their position in China has been under constant attack from even lower-end Android vendors, so moving overseas is now a necessity.”
Shipments of Xiaomi phones fell 9 percent year on year in China in the first quarter, according to Strategy Analytics, and its market share dipped to 12 percent from 13 percent, 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, were “an important step forwards to support our expansion internationally.”(SD-Agencies)
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