Xiaomi to preinstall Office and Skype on all devices as it buys 1.5K patents from Microsoft, cross-licenses others
Software maker Microsoft Corp (MSFT.O) is selling about 1,500 of its patents to Chinese device maker Xiaomi [XTC.UL], a rare departure for the U.S. company and part …
Context & Ripple Effects
This deal follows a template Microsoft had already tested: in 2015 it struck a patent license with ASUS that bundled Office preinstallation on Android devices. What changes here is scale and direction — Microsoft isn't just licensing to Xiaomi, it is selling roughly 1,500 patents outright plus a cross-license, while getting Office and Skype onto every Xiaomi device.
For Xiaomi, the purchase slots into a strategy it had flagged a year earlier: building a patent 'war chest' ahead of a planned U.S. launch. The pattern held afterward — Xiaomi signed a multi-year cellular SEP cross-license with Nokia in 2017, confirming that accumulated IP was the entry ticket to Western markets.
First-order effects
- Xiaomi gets immediate legal cover for its devices in markets where Microsoft's portfolio bites, plus differentiated hardware shipping with Office and Skype preinstalled; Microsoft converts dormant IP into cash and gains distribution on one of the largest Android OEMs.
Second-order effects
- Other Android makers now face pressure to match both halves of the bundle — ASUS-style Office preinstall deals become table stakes, and OEMs without comparable cross-licenses carry a cost disadvantage against Xiaomi.
Third-order effects
- If the pattern holds — Microsoft later widened the approach by joining the Open Invention Network and cross-licensing over 60,000 patents — patent portfolios shift from litigation weapons to tradeable currency, letting Chinese OEMs buy their way into Western markets while U.S. software firms buy distribution.
The trend: Patent portfolios are becoming the currency of Android OEM expansion, with Microsoft trading IP for software distribution as Chinese vendors accumulate the licenses needed to go global.