Last week was a big one for Chinese smartphone-maker Xiaomi. It held a launch event for three new products, including a flagship handset model, less than a month after market research firm Canalys showed it falling behind Huawei in the market for domestic mobile phone sales. The company has traditionally relied on generating excitement through fan engagement and online flash sales, so these product revelations – very much in the Apple mould – play an important role in its commercial strategy. We learned a couple of interesting things about Xiaomi this time around, including its goal for next year’s patent filing numbers, and the fact that its partnership with Microsoft appears to have deepened – its newly released tablet will be capable of running Windows 10.
A day before the event, Xiaomi Global VP Hugo Barra shared this slide with his Facebook followers. The graph shows the steady growth of the portfolio since 2011. Shortly after Xiaomi sales were suspended in India last December as part of a still ongoing patent dispute between the Chinese company and Ericsson, president Lin Bin promised that the company would ramp up its filings to more than 2,000 in 2015. The latest figures, though, show Xiaomi on pace to double up on that goal. While the company managed 2,045 applications for all of 2014, it has filed 3,738 this year through the end of October. That would put it on pace for more than 4,500 by year's end. Company president Lin Bin expects that pace to continue, commenting on Chinese social media that passing the 10,000 mark for the total portfolio within the next year would be “no problem”.
One particular point of emphasis was non-Chinese filings. Overseas applications, mostly in Europe, the United States, Japan and South Korea, account for more than 40% of 2015’s total, according to Barra. He also implied that we are not talking about designs or utility models, saying the figures represented “patents for invention”. What we do not know is how many are relevant to the smartphone space, so far the only tech category in which the company has been challenged in court. With wearables, air purifiers and even automobiles also accounting for some of that intellectual property, the company has a long way to go before it can catch up to its principle commercial competitor, which at the moment is Huawei.
Another interesting development was the announcement that Xiaomi’s newest tablet, the Mi Pad 2, will be capable of running Windows. This was not altogether unexpected. Back in March, the companies launched an “experimental” programme which allowed certain Xiaomi power users to test a technical preview of Windows 10 on certain Mi smartphones and give feedback to Microsoft. Then in July, Microsoft hinted that it was getting ready to expand this offering to a greater number of Xiaomi users and devices. Now we have confirmation that the Mi Pad 2 will be released in two versions – one using the company’s signature MIUI Android build, and another one pre-loaded with Windows 10.
For Microsoft, getting its mobile operating system in front of Xiaomi’s massive user base is a no-brainer. For Xiaomi, the benefits are slightly less clear. After all, a key part of Xiaomi’s business strategy in the low-margin mobile space is monetising services through its own custom Android operating system. Could IP play some part in the calculus? As IAM has reported, patents are increasingly being used not just to drive pure licensing revenue but also to facilitate strategic partnerships. Microsoft has been at the forefront of this trend; a recent licence agreement with Asus, for example, paved the way for the pre-installation of Microsoft Office software on the Taiwanese company’s devices. Seen in that light, a deeper commercial partnership with Microsoft certainly cannot hurt patent-challenged Xiaomi.