Microsoft is about to hit it big with one of China's top smartphone manufacturers: Xiaomi. It has announced today a multi-faceted deal with the company including sales of patents, cross-licensing arrangements, and software pre-installation, expanding its OEM partnerships and its services' worldwide reach while also providing Xiaomi with the support it needed to enter more markets.

Microsoft will be selling 1500 patents to Xiaomi — it's not clear whether these came from the Nokia acquisition, its many other acquisitions, or ones that it originally filed for. Regardless, according to Wang Xiang, senior vice president at Xiaomi, this should beef up Xiaomi's arsenal of patents and should, theoretically, make it easier for the company to enter Western markets with lesser friction from other patent holders. It might be one of the rarest occasions you'll come across where Microsoft sells patents, but both analysts and logic say that it probably had to do it in order to strike the larger deal with Xiaomi.

And that larger deal includes a patent cross-licensing agreement that should further solidify Xiaomi's legal grounds as well as another agreement to preload Microsoft's services and apps on Xiaomi's phones and tablets. Given Xiaomi's reach in China, India, and other Asian countries, this would allow Microsoft to considerably widen its user base.

The deal's details haven't been disclosed so it's impossible to tell how much money has changed hands and in which direction, but it seems like a mutually beneficial one for both parties. It also strengthens Microsoft's position as a service provider as opposed to a hardware maker, a trend I keep seeing time and again in the company's latest moves and deals.

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Source: Reuters