Xiaomi showroom

Xiaomi has signed a deal with Microsoft to preload Office and Skype on Xiaomi devices. The company is also acquiring 1500 Microsoft patents. Starting in September 2016, Xiaomi’s Android devices, including Mi 5, Mi Max, Mi 4s, Redmi Note 3 and Redmi 3, will have Microsoft Word, Excel, PowerPoint, Outlook and Skype applications pre-installed on them.

It’s worth noting that Xiaomi has a VoIP service of its own called Mi Voice, which incidentally had made an appearance on Indian handsets, in March 2016, though it still wasn’t working at the time.

In 2015, Xiaomi had a market share of 15% in China, as per data released by IDC. Apparently, in the month of April this year, Xiaomi’s market share went up to 26% in China. Note that this is based on just the sales figure of April and isn’t confirmed yet. However, what it does illustrate is that the Chinese smartphone market is becoming increasingly saturated, with hardly any room to manoeuvre further. Thus, the acquisition of Microsoft patents will allow Xiaomi to push beyond China, developing markets, and into markets like the US, which it has been eyeing for some time now.

Late last year, Xiaomi had signed a 3G and 4G China patent license agreement with Qualcomm. As part of the deal, Xiaomi will be able to develop, manufacture and sell 3G (WCDMA and CDMA2000) and 4G, including 3-mode (LTE-TDD, TD-SCDMA and GSM) complete devices. The patent license is royalty-bearing.

Also Read: Xiaomi’s thin patent portfolio causes it to run into patent litigations – SpicyIP

Regulatory hurdles

Regulatory hurdles are also hurting Xiaomi in developing markets, where it has been stifled by several litigation and injunctions.

It recently received some help after the Delhi High Court partly agreed with Xiaomi that Ericsson concealed relevant information about two of its 3G patents, and withdrew the interim injunction on Xiaomi as it was based on these patents. The court had previously stopped Xiaomi from importing and selling handsets in India after Ericsson’s complaint in December 2014. Later that month, Xiaomi was allowed to import or sell Qualcomm chipset-based handsets in India, which meant that it could continue selling Redmi Note 4G and Redmi 1S in India, but Redmi Note that runs on Mediatek-based chipset remained banned.

Xiaomi has had an even more difficult time in Brazil, where changes in local taxing and manufacturing policies for ecommerce sales have forced them to stop local manufacturing and now all phones sold in Brazil are being imported.