Is Xiaomi acquiring patents as it looks to international markets?

As growth in the worldwide smartphone market continues to slow, Xiaomi is hoping to continue to expand its international presence. And it may be gearing up by compiling a patent portfolio.

As the Wall Street Journal reported this week, the Chinese handset vendor struggled in 2015 after a meteoric rise during the past few years. Xiaomi reportedly fell short of its goal of selling 80 million smartphones last year due largely to an ultra-competitive market for low-end Android devices in China. Indeed, Huawei overtook Xiaomi as China's top-selling smartphone vendor in October, according to Canalys.

As the Journal notes, overseas growth has been slow for Xiaomi due in part to a lack of patents that, among other things, led to a court ruling that limited its access to the burgeoning India market.

But Xiaomi may quietly be moving to address that shortcoming. IAM, a Hong Kong-based media outlet, reported this week that an assignment recorded with the U.S. Patent and Trademark Office indicates Broadcom transferred 19 U.S. patent assets to a company named Xiaomi H.K. Ltd, which is also headquartered in Hong Kong. The transfer includes 15 issued patents and four applications that relate to wireless telecom technology.

IAM has also reported that Xiaomi holds a major stake in Zhigu, a Beijing-based patent aggregator.

It still isn't clear whether the Hong Kong company that acquired the patent assets from Broadcom is associated with the Chinese manufacturer. But as the Chinese market slows -- and as Xiaomi feels the weight of an extremely lofty valuation -- the company clearly is compelled to move into new markets.

Xiaomi may not have its sights set on the U.S. yet -- a patent battle with Apple would almost surely follow -- but enormous potential for growth exists in India and other emerging markets, where smartphone penetration is still relatively low. With the right patents in its arsenal, Xiaomi could finally move into such markets aggressively.

For more:
- see this IAM article

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