Xiaomi will buy roughly 1,500 patents from Microsoft in a deal that will see the Chinese manufacturer install copies of software such as Office and Skype on its phones and tablets.
Terms of the agreement were not disclosed.
A lack of patents has shackled Xiaomi's efforts to expand its business as growth in its home market has slowed, but the company appears to be arming itself with a patent portfolio to enable it to better compete in foreign markets. For example, IAM, a Hong Kong-based media outlet, recently uncovered documents indicating Broadcom transferred 19 U.S. patent assets to a company named Xiaomi H.K. Ltd. The transfer includes 15 issued patents and four applications that relate to wireless telecom technology.
Xiaomi has no carrier relationships in the U.S., and earlier this year it nixed an effort from a minor MVNO to sell three of its smartphones online.
The deal also marks a substantial distribution win for Microsoft, which has long struggled to leverage its success with software for PCs in the world of mobile. Beginning this September, Xiaomi devices including the Mi 5, Mi Max, Mi 4S, Redmi Note 3 and Redmi 3 will be sold running Microsoft Word, Excel, PowerPoint, Outlook and Skype. Specific apps will vary by device, market and mobile network operator.
"We are excited to be working closely with Microsoft on a broad technology collaboration partnership," Xiaomi Senior Vice President Xiang Wang said in a press release. "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 was the world's fifth-largest smartphone vendor in the fourth quarter of 2015, according to IDC, but it slipped out of the top five in the first quarter of 2016 as fellow Chinese vendors Oppo and Vivo made huge strides. The company enjoyed a meteoric rise in 2013 but last year sold "over 70 million" phones in 2015, falling well short of the 100 million founder Lei Jun had predicted.
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