An agreement for cross-licensing of patents between Finland’s Nokia and Chinese smartphone maker Xiaomi will allow both the companies to make use of each other’s patents for the purpose of development of new products as announced by the companies on Wednesday.
The licenses for the so-called standard essential patents — patents which are essential to allow products to comply with an industry standard, are the ones that both the companies would share with each other under the deal.
High capacity, low power requirements that are needed by companies that are processing and delivering lots of data, would be provided by Nokia through network infrastructure equipment to enable that. Technologies that are focused on the data center would also be among the technologies that the two firms will also work together on.
According to a press release, in areas such as the internet of things, augmented and virtual reality, and artificial intelligence, both companies have agreed to “explore opportunities for further cooperation”.
Nokia makes money from licensing the patents it has built up over the years and even today, the company has been a key player in developing many of the standards used by the mobile industry. And therefore, for companies looking to expand globally in the mobile market without running into legal problems, Nokia’s patents can be key.
One such company is Xiaomi. The company has recently struggled versus newer entrants such as Oppo and Vivo even though it was once the darling of the Chinese smartphone market, growing rapidly each quarter. And with India becoming one region where it has seen success, Xiaomi has been looking to expand into other markets.
And even though the company says it’s in 30 countries and regions, it is yet to move out of Asia with its smartphones. This multinational tag is allowed by the other connected products that the c company sells abroad. And to continue its mobile and connected device expansion, Nokia’s patents could be a help. While the Nokia deal doesn’t mean the company is focusing on one particular market, it will help with global expansion, a spokesperson for Xiaomi said.
Its own patent portfolio exists with Xiaomi. The company has been granted 4,000 of the more than 16,000 patent applications that it had applied for in the seven years it has been in existence. 1,887 of these are overseas. The portfolio of products which already includes TVs, smartphones, and air conditioners, is being sought to be built up on by the Chinese firm.
“Xiaomi is committed to building sustainable, long-term partnerships with global technology leaders. Our collaboration with Nokia will enable us to tap on its leadership in building large, high performance networks and formidable strength in software and services, as we seek to create even more remarkable products and services that deliver the best user experience to our (product brand) Mi fans worldwide,” Lei Jun, chairman and CEO of Xiaomi, said in a press release.
(Adapted from CNBC)