China’s Xiaomi And Nokia Strike Patent Licensing Deal

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On Wednesday, Chinese smartphone maker Xiaomi and Nokia signed a patent licensing agreement, whereby the companies will have access to each other’s cellular standard patents. The deal with Nokia also offers network infrastructure equipment to Xiaomi.

What the patent deal between Xiaomi and Nokia includes

Xiaomi and Nokia are coming together to improve optical transport solutions for data center interconnecting, IP routing based on the recently-announced FP4 network processor, and a data center fabric solution.

In a statement, Nokia Chief Executive Rajeev Suri said, “Xiaomi is one of the world’s leading smartphone manufacturers and we are delighted to have reached an agreement with them.”

The Finnish company will offer up-to-date network infrastructure equipment to deliver high capacity, low-power requirements helpful in processing and delivering data. Xiaomi and Nokia will also work together on technologies that focus on data centers. Other than this, the companies have agreed to explore new avenues and opportunities in the field of artificial intelligence, augmented and virtual reality, and the Internet of Things.

The agreement between the two involves standard essential patents, which means patents covering technology that is required to make products that are in line with the industry standards. Nokia is a veteran player in the field of patent licensing, but the same cannot be said for Xiaomi. Therefore, this deal is of great importance to the Chinese company. With the help of these patents, Xiaomi will be able to ramp up its smartphone and connected device technology.

So far, Xiaomi has applied for over 16,000 patents during the seven years of its existence, and it has been granted 4,000 of them. About 1,887 patents that the Chinese company has received are overseas. Xiaomi is looking to expand its portfolio to include products such as televisions, air conditioners and smartphones, notes CNBC.

Nokia’s patent to help Xiaomi’s global expansion

Afflicted by dwindling sales and the emergence of new leaders such as Oppo and Vivo, Xiaomi has been struggling to get to the top. In an effort to ramp up its sales, the company has made a significant investment in retail stores in its native country. However, the smartphone maker suffered significantly in the international market after Hugo Barra, its former international head, departed. It is not a preferred smartphone brand outside Asia, despite the fact that it is present in 30 countries and regions

At present, Xiaomi is looking to get a greater piece of the pie in emerging markets such as Russia, Indonesia and India. However, getting a strong foothold in the United States is something that the company is aiming for going forward, notes Bloomberg. The patent deal with Nokia could prove very handy in its quest for global expansion.

Lei Jun, chairman and CEO of Xiaomi, stated that the company is working toward building sustainable and long-term partnerships with global technology leaders. Jun added that collaborating with Nokia will help his company build high-performance networks and achieve unmatched strength in software and services as they  “seek to create even more remarkable products and services that deliver the best user experience to our (product brand) Mi fans worldwide.”

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