Microsoft announced that it had entered a new partnership with Xiaomi yesterday, one that will see Office 365 pre-installed on the Chinese OEMs phones and the transfer of 1,500 patents to Xiaomi.
What does this mean for MIcrosoft’s smartphone business model, which has traditionally relied upon getting Android OEMs to pay for licenses to Microsoft patents to produce the profits that Microsoft’s Windows Phone couldn’t?
Does it suggest that Microsoft has identified more opportunity to profit from Office 365 than through licensing fees for its patents? Or is it just so desperate to get its software in front of smartphone buyers (especially in China) that it is prepared to give up the keys to the shop?
It isn’t the first time that Microsoft has assigned patents to a third party. Whether this just a normal part of this process or what element of pro quid pro underpinned the deal remains to be seen.
The fact that Xiaomi took part in the Windows 10 Mobile Insider program by allowing owners of some of its Android phones to replace Google’s OS with Microsoft’s suggests to me that there is much more to this than meets the eye.