Microsoft sells mobile patents to Xiaomi, signs software bundling deal

Microsoft’s orderly retreat from mobile devices is turning into a rout with the news that it has sold nearly 1,500 technology patents to Chinese devices company Xiaomi.

While the patent deal has had no formal announcement, widespread reports feature confirmations from Xiaomi. Microsoft could well have acquired most of those patents along with Nokia’s devices unit and, as that now seems surplus to requirements, so too are the patents.

For Xiaomi, while the patents could contribute to its R&D efforts, the primary purpose of the acquisition seems to be as a defence from patent litigation. The smartphone era has been characterised by suing and counter-suing over every conceivable nuance of functionality and, as it prepares to take the next step in its international expansion, it’s thought Xiaomi wants to have some patents up its sleeve in case any rivals point their lawyers in its direction.

The two companies did publicly announce another deal – for Xiaomi to bundle Microsoft Office and Skype onto its Android smartphones and tablets. This is consistent with Microsoft’s mobile exit strategy, which is to focus on software and services rather than hardware.

“We are excited to be working closely with Microsoft on a broad technology collaboration partnership,” said Xiang Wang, SVP  at Xiaomi. “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.”

“People want their favourite apps and experiences to work seamlessly on the device of their choice, and that’s exactly what this partnership offers,” said Peggy Johnson, EVP of Business Development at Microsoft. “Together with Xiaomi, we’re bringing the very best in mobile productivity to millions more customers in China and around the world.”

Android users are already able to download Office and Skype if they want so, unless there is a subsidy involved this looks a bit like bloatware, but it may give Xiaomi’s marketing an extra bit of international legitimacy. The patents seem like yet another phase in the great Microsoft mobile fire sale and you have to wonder how much is left.