XIAOMI'S GLOBAL

EXPANSION PLAN
A PATENT PORTFOLIO ANALYSIS

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Table of Content 
Introduction 2 

The Global Expansion Plans of Xiaomi 3 

Biggest Hurdle in Xiaomi’s Global Expansion Plan: Patent Lawsuits 5 

How Many Patents Does Xiaomi Have? 6 

Which Countries, other than China, Xiaomi has patents in? 8 

Acquisitions – The Secret Way Xiaomi Planned To Expand Beyond China 11 

Technology Transfer Agreement with Leadcore Technologies 11 

Ninebot acquires Segway with help of Xiaomi 12 
Patent Assignment with Broadcom Corporation 12 
Patent Licensing Deal with Qualcomm 12 
Patent collaboration with Guangzhou Feimi Electronic Technology 13 
Patent Assignment deal with Foshan Gales Electrical Appliance Technology Co., Ltd. 13 
Patent acquisition deal of Xiaomi with Intel 13 
Microsoft - Xiaomi Patent deal 14 
The Absorption of Ruichuan IPR funds 14 
Xiaomi Bought Patents From Nokia 15 
Patent deal with Casio 15 
350 Patent Assignments From Phillips 15 
Licensing agreement with NTT Docomo for 5G Standard Essentials 16 
Taking Over Meitu Hardware Business for Selfie-focused Smartphones 16 

The Innovation Game 17 

Key Takeaways from the Analysis 18 

 

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Introduction 
Xiaomi has been surprising the consumer electronics industry with its innovative and affordable products since its inception. 

Founded  in  2010,  the  startup  quickly  became  a  smartphone  leader  in  the  Chinese  market.  Its  success  was  attributed  to its innovative 
e-commerce  tactics  --  ​gave  it  a  kind  of  first-mover  advantage  and  a  rise  in  the  demand  for smartphones. The success party, however, 
didn’t last long as others started using the same tactics and rolled​ ​products with similar features​ and price ranges. 

As  a result, it lost its Chinese market share of the smartphone to companies like Oppo, Vivo, and Huawei. Xiaomi soon realized that the 
Chinese  smartphone  market  has  become  saturated  and  in  order  to  keep  the  pace  of growth, it needs to expand globally into markets 
that are yet to be saturated. 

Hence  started  Xiaomi’s  global expansion plan which has been in an on-going mode for quite some time. The journey of Xiaomi by now 

has  not  been  smooth  by any measure and faced a lot of challenges. Also, Xiaomi implemented new business strategies along the way. 
An account of all of this we have brought in this article for you. 

The Global Expansion Plans of Xiaomi 

Xiaomi  was  founded  in  2010.  The  privately-owned  Chinese  electronics company ventured into the smartphone market with the launch 
of Xiaomi 1S (released in August of 2011), selling over 300,000 pieces in that fiscal year. 

In  2012,  the  sales  numbers  increased  by  2400%,  with  the  launch  of  Xiaomi  2S  and  2A  models,  which  were a significant improvement 
over  its  predecessors.  With  the  addition  of  flagship  models  with  improved  features  at  stunningly  low  costs,  the  sales  soared 
exponentially and by the end of 2013, Xiaomi ​was valued​ at $10 billion. 

In  2014,  Xiaomi  took the smartphone world by storm by introducing flash online sales and sleek marketing strategy. In India alone, they 

claimed to have ​sold 1 million smartphones​ by partnering with Indian e-commerce giant Flipkart. 

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These  marketing  tactics  were  a  huge  success,  as  Xiaomi sold over 61 million phones in 2014, whilst earning ​the third spot on the list of 
biggest  smartphone  makers  on  a  global  scale.  By  the  end  of  2014,  Xiaomi  was valued at 45 billion dollars making it ​the most valuable 
startup​ in the world. 

And then the fall: 

Sales  figures  from  2015  came  as  a  disappointment  as  Xiaomi  sold  merely  70  million  phones  that  year,  which  though  was  an 
improvement over previous year’s numbers, fell short of their speculated ​sales target​ ​by 10 million. 

The  table  for  Xiaomi  started  turning  in  the second quarter of 2015 when Huawei toppled it as a top smartphone vendor of the Chinese 

market. Looking back at the global​ ​sales data​ from the first quarter of 2015, the situation was imminent. 

Let’s win back move: 

The  most  valuable  startup  in  the  world  (now  dethroned  by  Uber)  knew  well  that  global  expansion  was  the  key  to  achieving  the  top 
spot. If they wanted to soar higher in the consumer electronics market, they needed to expand beyond China, especially in the USA. 

Before  reaching  its  Zenith,  Xiaomi  had  already  forayed  into  other  Asian markets including Singapore, Malaysia, Philippines, Indonesia, 
Hong Kong, Taiwan, and India, with plans to expand to other international markets as well. 

On  June  30th  of  2015,  Xiaomi  made  its  first  foray  ​into the international market by expanding its operations to Brazil, with the launch of 
Redmi2. 

Soon  after,  the  second  quarter  reports  of  2015 emerged, and in an attempt to chase the #1 spot, Xiaomi’s co-founder Bin Li went vocal 

about its global expansion plans encompassing the US as well. 

Earlier,  the  company  had  slowed  down  its  expansion  plans  in  order  to  learn  more  about  each market it enters. But that was no longer 
the  case.  Xiaomi  entered  the  swift  expansion  mode.  In  ​November  2015​,  they  expanded  sales  to  the  African  continent:  Specifically 
Kenya, Nigeria, and South Africa. 

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Xiaomi  even  succeeded  in  penetrating  ​the  US  and  ​European  markets  via  its  online  MI  store  albeit  limiting  sales  to  smartphone 
accessories  and  activity  trackers.  The move (limiting sales of handsets in the US market), though marketed as a precursor to gauge the 
reaction of consumers, had a big reason beneath it: The lack of patents. 

Biggest Hurdle in Xiaomi’s Global Expansion Plan: Patent Lawsuits 

In  India,  Xiaomi  faced  its  first  setback  when  the  Delhi  High  Court  issued  a  ​temporary  order  and  blocked  Xiaomi  and  its  distributor 
Flipkart  from  importing,  marketing  and  selling  smartphones  that  were  infringing  Ericsson’s  eight  patents.  It  was  one  of  the  biggest 
lawsuits that Xiaomi faced by a big company.  

Similarly,  in  the  US,  it  received  a  not-so-warm  welcome  with  a  patent  ​lawsuit  by  Blue  Spike  over  its  upcoming  devices  MI  5  and  MI  5 
plus. 

Even  in  its  home  country,  China,  Xiaomi  couldn't  avoid  patent  lawsuits.  The  recent  allegations  of  Yulong  Computer  Communications 
Technology  (Shenzhen)  Co. Ltd,  owned by Coolpad Group, has put Xiaomi in another ​lawsuit ​for infringing Coolpad's 3 patents related 
to  smartphone  app  icon  management  and  other  UI  elements.  The  lawsuit  was  filed  on  26  January  2018  in  Guangdong  Province 
Shenzhen Intermediate People’s Court. 

Though  Xiaomi  yearns  for  global  expansion,  it  lacked  a  strong  patent  portfolio.  And  to  top  it  all,  most  of  its  products  resemble  other 
existing products. For instance, in 2014, Mashable called out MIUI (Xiaomi's customized version of android) a blatant iOS ripoff.  

These  all  factors  in  unison  made  it  imperative  for  Xiaomi  to boost its patent portfolio by acquiring third-party patents – which was long 
anticipated.  Broadcom,  a  semiconductor  company  based  out  of  the US, transferred 19 patents to Xiaomi, pinpointing ​an assignment of 
the USPTO. 

With  all these factors in mind, and to answer a few questions that were in our curious head, we accessed the patent portfolio of Xiaomi, 
which has been filing patents since 2009, to see what the Chinese Apple is up to in terms of innovation. 

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How Many Patents Does Xiaomi Have? 
Xiaomi  now  has  more  than  28,000  patents  in  its  portfolio  globally  (14,000+  unique  patents  per  family)  with  more  than  60%  Chinese 
patents.  The  2015  and  2016  were  the  best  years  for  Xiaomi  in  terms  of  patent  filings;  the  company  saw  the  biggest  growth  in  its 
portfolio in those two years.  

Here’s a chart showing how Xiaomi’s patent filing grew over the course of the past few years: 

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Even though the earliest patent in Xiaomi’s portfolio dates back to 1995, Xiaomi filed its first patent in 2010. 

All  of  the  patents  appearing in its portfolio before 2010, were the result of patent acquisitions and were mostly of the US origin. We got 

curious  and  decided  to  dig  deep  to  see  the  origin  of  these  patents.  Our  analysis  revealed  that  out  of  these  652  patents,  Intel 
Corporation was the original owner of the 321 patents. 

Between  Xiaomi’s  dream to penetrate the US and other global markets, the biggest roadblock was a thin patent portfolio. In house, the 

patent  filing  was  not  a  viable  option  as  it  might  have  taken  another  decade  to  build  a  considerable  patent  portfolio.  Xiaomi  strategy 
hence included patent acquisition alongside with in-house patent filing. 

Xiaomi  filed  its  first  two  patents  on  27th  Dec  2010. The third patent of 2010 in Xiaomi’s portfolio was originally filed by China Academy 
of  Telecommunication  Technology.  Other  than  3  Chinese  patents,  Xiaomi  also  has  8  US  patents  dating  back to 2010, which originally 
belonged to LSI Corporation (which was acquired by Avago Technologies in 2013, which later merged with Broadcom Corp). 

In  2011,  Xiaomi  added  59  patents  to  its  portfolio.  Out  of  these  59,  14  patents  belonged  to  Broadcom  Corp  (more  details  in  a  later 
section) and the rest were filed by Xiaomi itself. 

With  396  patents,  Xiaomi’s  patent  filing  almost skyrocketed in 2012. Out of these 396, most of the patents are the result of their patent 

acquisition deals. Three out of these patents were acquired from Broadcom Corp, and few of the rest were filed by Xiaomi in China. 

In  2013,  Xiaomi’s  patent  filing  kept  a  rising  trend.  The Millet Company filed 1077 patents that year. In 2014, Xiaomi beefed up its patent 

arsenal  by  adding  2693  patents,  hundreds  of  which  were  a  result  of  various  patent  acquisition  deals  (more  details  below  in  the 
acquisition section) 

“We're  building  our  own  portfolio  of  patents  for  defensive  purposes, because you kind of have to have that. Think of it as 
a  war  chest  of  sorts.  We've  filed  over  2,000  patents,  which  is  actually  a  lot,  and  we're  acquiring  patents”,​   Hugo Barra in 
one of his interviews with​ ​Bloomberg.”​  

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Which Countries, other than China, Xiaomi has patents in? 
The  chart  below  represents  the  geographical  distribution  of  Xiaomi’s  patent  portfolio.  These  are  the  countries  where Xiaomi has filed 
patents in: 

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Xiaomi  has  a  majority  of  its  patents,  17361  to  be  precise,  in  China.  After  China,  the  USA  is  the  top  second  country  where  Xiaomi  has 
2553  patents  in  its  portfolio.  The  increase  in  the  number  of  US  patents  is  an  indication  of  Xiaomi’s  increased  efforts  to  enter  the  US 
market. 

Of  course,  we  intend  to  gain  space  in  those  major  markets,  U.S.  and  Europe,  but  we’ll  only  try  it  when  we  feel  stronger 
and more mature. –​ ​Hugo Barra 

Europe  with  1542  patents  is  the  top  third  country  where Xiaomi holds the maximum of its patents, followed by Japan at the fourth spot 
with  933  patents.  Interestingly,  in  our  previous  update  of  this  article, Xiaomi only had 408 patents in Europe with no news about when 
they were planning to enter the market. 

Xiaomi  earlier  was  only  selling  accessories  like  headphones,  fitness  bands,  and  power  banks  from  May  2015  using  their  retail stores. 
You  could  say  that  it  was  an  attempt  to  build  the  market  interest  until  they  work  on  a  stronger  patent  portfolio  to  finally  make  a  big 
splash using their smartphones. 

After  2  years of waiting, their portfolio grew stronger, Xiaomi felt enough confidence to enter Europe’s market by placing their first step 
in Madrid, Spain. The company launched Mi Mix 2 and Mi A1 smartphones in November 2017 in an event held in Madrid. 

Then  comes  their  presence in Japan which is currently almost zero. In terms of their patent portfolio, Xiaomi has pumped up its arsenal 

quite  well  throughout  the  years.  Till  2016,  with  just  172  patents  Japan  was  at  the  seventh  place  in  top  countries.  And  now,  they  have 
almost  1000  patents  in  Japan,  taking  it  to  top  fourth  place.  Being  a  neighbor  country,  it  makes  sense  to  secure its invention as Japan 
could prove a valuable market especially when SONY is struggling in its smartphone business. 

Next  on  the  list  is  South  Korea,  where  consumers  have  an  appetite for the high-end smartphone at cheaper prices, which was vital for 
Xiaomi’s sales expansion outside the home country. 

Interestingly,  in  an  attempt  to  enter  Korean  markets,  with  144  patents in its arsenal at that time, Xiaomi launched its first smartphone in 
South  Korea  on  4  January  2015  through  mobile  carrier  KT  Corporation.  A  couple  of  days  later,  on  January  6,  Xiaomi  pulled  back  its 
smartphones  from  the  Korean  Market  due  to  some  legal  matters,  according  to  a  report  by  the  ​Korean  Times​.  Speculations  were  that 
lack of Korean patents might be a strong reason beneath the matter. 

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Xiaomi  took  the  lesson  and  further  strengthened  its  Korean portfolio to make a foray into the market. Less than 6 months later, Xiaomi 
made  a  re-entry  in  South  Korea  by  opening  ​its  first  offline  store  in  Seoul.  At  the  moment,  the  company  has  923  Korean  patents  in  its 
arsenal. 

India  with  900  patents  sits  at  the  sixth  spot  followed  by  Russia  at  seventh  with  785  patents.  Xiaomi’s  progress  in  India  has  been 
tremendous after the pullback that occurred with Ericsson’s lawsuit against them. 

From  then,  India  has  proved  an  interesting  market for Xiaomi. Following Xiaomi, other Chinese smartphones also made an entry to the 

Indian market and now Xiaomi has many competitors in India. 

Xiaomi  overtook  Samsung  in  2017  and  became  the  top  smartphone company in India. Looking at just this year, they sold more than 10 
Million  devices  in  the  2nd  quarter  of  2018,  a  number  that  was  never  achieved  by  any  smartphone  company  before. Even in 2019, the 
company had the​ ​biggest market share in India​ followed by Samsung. 

As  we  have  already  talked  about  how  their  portfolio  has  grown  at  a  different  pace  in  different  countries. Here’s a table to show you a 
full timeline of Xiaomi’s patent portfolio growth globally.  

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These are the top countries along with the patent count that the company received each year either by filing or acquisition. 

Acquisitions – The Secret Way Xiaomi Planned To Expand Beyond China 

Xiaomi  has  a  dream  of  global  presence  which  means  entering  into  multiple  markets.  But  one  thing  is  sure;  every  country  will  be 
welcoming Xiaomi with warm patent infringement suits. Ericsson in India and Blue Spike in the US have already done that. 

So should Xiaomi be worried? 

Just  as  we  said  earlier,  2  years  ago  it  would  have  been  but  maybe  not  now.  Now  though,  Xiaomi  dedicated  efforts  to  expand  their 
patent portfolio prove that they understood the importance of having an IP strategy in place to foray into global markets. 

From  4702  patents  in  Jan  2016  to  more  than  28,000  patents  currently  (as  of  20  march  2020),  mostly  by  filing  and  partly  by 
acquisitions,  Xiaomi  had  significantly  beefed  up  its  portfolio.  The  company  made  some  sizable  patent  acquisitions that would remove 
some thorns from the path on its way to global expansion. 

Having said that, let’s see the list of acquisitions that Xiaomi did to beef up its patent arsenal: 

Technology Transfer Agreement with Leadcore Technologies 

As  Qualcomm  was  facing  some  inevitable  complications  in  China,  the  technology  transfer  was  a  major  negotiation  to the situation for 
Xiaomi.  This  led  Xiaomi  to  Leadcore  Technologies,  a  subsidiary  of Datang Telecom and a renowned smartphone chip manufacturer in 
China. 

In  Nov  2014,  Leadcore  Technologies  entered  into  a  $US16.8  million  deal  with  Beijing  Sunggao  Electronics,  which  according  to 
TechWeb  is  a  company  controlled  by Xiaomi. The purpose behind the deal was the acquisition of Leadcore’s core technology patents, 
reads a report by ​QQ​. 

The  extracted  patent  portfolio  of  Xiaomi  revealed  the  acquisition  of  30  patents.  These  patents  cover  4G  and  other  chip-related 
technologies. 

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Ninebot acquires Segway with help of Xiaomi 

In  Apr  2015,  Ninebot  Inc.,  which  claims  itself  as  the  first  smart  short  transportation  equipment  operator in China, acquired Segway. As 
per  a  report  by  ​Bloomberg​,  the  purchase also added 400 patents of Segway into the portfolio of Ninebot, parts of which are owned by 
Xiaomi. 

In Oct 2015, ​Ninebot​ launched its first self-balancing scooter with which Xiaomi embarked on the field of transportation gadgets. 

At  the  time  of  this  acquisition,  Ninebot  was  under  patent  lawsuits  filed  by  Segway  and  Inventist.  Being  an  emerging  startup  in  the 
self-balancing vehicle industry, their patent portfolio was just as weak as Xiaomi had in its early days. 

This  acquisition  was  an  exceptional  strategic  move  by  Ninebot;  with  the  financial  help  of  Xiaomi,  they  acquired  Segway  and  freed 
themselves from the lawsuit. Another benefit was, they now had enough patents in their arsenal to counter sue Inventist (The Company 
with  the  first  patent  of  Hoverboard).  You  can  read  the  entire  patent  battle  of  the  Hoverboard  industry  and  how  a  single  patent  just 
turned it upside down,​ ​from here​. 

Patent Assignment with Broadcom Corporation 

In  October  2015,  Broadcom  Corporation  assigned  20  patents  to  Xiaomi.  Most  of  the  patents  covered  in  the  deal were of the wireless 
communication domain. Oblon was the law firm involved in this assignment. 

Patent Licensing Deal with Qualcomm 

Qualcomm,  in  December  2015,  announced  signing  a  ​patent  licensing  agreement  with  Xiaomi  under  which  the  latter  will  be  paying 
royalties  for  its  3G  and  4G  smartphones.  The  deal  helped  Xiaomi  include  one  out  of  two  types  of  patents  –  related  to  wireless 
communication –in its arsenal. The other types of patents Xiaomi is seeking is of smartphone designs and features. 

Qualcomm's  ​patent  licensing  business  is  intriguing.  It  earns  more than $6bn every year from licensing revenue. What's the secret? We 

have conducted a deeper analysis of Qualcomm’s patent portfolio as well which you can find​ ​from here​. 

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Patent collaboration with Guangzhou Feimi Electronic Technology 

In  2014,  an  Investment  subsidiary  of  Xiaomi,  Tianjin  Jinxing  Investment,  ​invested  4  million  Yuan  in  Guangzhou  Femini  Electronic 
Technology which later filed 27 patents in collaboration with Xiaomi. 

These  patents  also  appeared  in  our  extracted  patent  sets.  From  further  analysis,  we  found  the  patent  set  disclosing  technologies 
related to aircraft shock absorbers, remote control, design structures and the like. 

This patent collaboration adds weight to Xiaomi's announcement of launching its first camera drone in 2016. 

Patent Assignment deal with Foshan Gales Electrical Appliance Technology Co., Ltd. 

Xiaomi  already  has  a  strong  presence  in  providing  smart  home  products,  like  air  &  water  purifiers,  smart  webcams,  and  routers.  In 
order  to  expand  its  intellectual  property  in  this  domain,  Xiaomi  has  bought  104  patents  from  ​Foshan  Gales  Electrical  Appliances​.  The 
company is a major manufacturer of home products like Juicers, water dispensers, etc. 

Patent Acquisition deal of Xiaomi with Intel 

In  December  2016,  News  surfaced  about  a  new  deal  among  Xiaomi  and  Intel.  Intel,  which  is  highly  active  among  US  companies  to 
penetrate  Chinese  Semiconductor  markets  earlier  entered  into  a  strategic  partnership  with  Chinese  semiconductor  company  Rockfit, 
while having a significant stake in Tsinghua Unigroup- the company that owns domestic chipmakers Spreadtrum and RDA. 

The  deal  with  Xiaomi  was  two-fold.  According  to  ​a  report  by  Digitimes,  in  early  December,  on  the  quest  to  land  Xiaomi  as  a  major 
client,  Intel  introduced  a  free  chip  deal.  For  every notebook processor Xiaomi purchased, Intel gave away a free tablet processor. This 
move was speculated to be an attempt so that Xiaomi would consider ordering Intel-based smartphone solutions too. 

Further  to  sweeten  the  relations  between  the  two  companies,  the  semiconductor  giant  transferred  ​the  ownership  of  332  patents  ​to 
Xiaomi.  Most  of  these  patents  were  originally  assigned  to  Intel  whereas  some  of  these  were  owned  by  LSI,  another  semiconductor 
company,  whose  networking  business  was  acquired  by  Intel  from  Avago(A  Broadcom  Corp  company),  who  originally  acquired  LSI  in 
2013. 

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Microsoft - Xiaomi Patent deal 

To  sell  its  handsets  in  the  US  market,  Xiaomi  signed  a  big  deal  with  Microsoft  to  remove  some  obstacles  from  its  US  invasion plan in 
2017. 

The  ​cross-licensing  and  patent  transfer  deal  ​among  the  companies  involves  the  acquisition  of  1500  of  ​Microsoft’s  patents  from  its 
global portfolio, for which Xiaomi is believed to have paid $40 million. 

Though  the  deal  is  official,  Microsoft  has  yet  not  assigned  the  patents  to  Xiaomi  yet.  According  to  a  report  by  Reuters,  the  patents 
belong to domains including voice communications, multimedia, and cloud computing. 

The Absorption of Ruichuan IPR funds 

In  September  2016,  ​News  surfaced  that  Xiaomi  quietly  absorbed  Ruichuan  IPR  funds,  a  government-backed  Chinese  patent-holding 
company. 

The  two-year-old  government-sponsored  company  was  known  to  be  seeded  with  $50  billion  to  acquire patents that could be used in 
action  against  US  competitors.  Xiaomi  was  known  to  have  a  sizable  stake  in  the  company,  which  was  attempting  to  build  a  massive 
arsenal for use in harassment litigation. 

Though  it remains unknown on the kind or number of patents the company has, it would be an interesting addition to Xiaomi’s portfolio 
knowing its interest in global markets. 

While  the  talk  is  on  global  expansion,  it  would  also  be  interesting  to  note  the  companies  that  Xiaomi  would  consider  acquiring  to 
succeed  in  its  quest.  While  there  are  a  lot  of  potential  candidates  ripe  for  acquisition,  two  names  top  the  list  considering  the  IP 
advantage they would bring to Xiaomi’s portfolio. 

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Xiaomi Bought Patents From Nokia 

Since  the  inception  of  Xiaomi's  global  expansion  plan,  it  has  been  into  a  lot  of  patent  deals  that  helped  it  build  a  strong  patent  war 
chest.  Its  patent  portfolio,  however,  is  still  incomparable  to  competitors  like  Samsung.  To  bridge  the  gap,  Xiaomi’s  efforts are on and 
the patent deal with Nokia is an effort in that direction. 

On  July  5,  2017, Xiaomi entered into a business cooperation and patent agreement deal with Nokia. The number of patents involved in 

the agreement or the price tag of the deal is still classified. 

The below​ ​statement by Nokia​ ​gives the gist of the agreement: 

“Under  the  business  cooperation  agreement,  Nokia will provide network infrastructure equipment designed to deliver the 

high  capacity,  low  power  requirements  expected  by  large  web  providers  and  data  center  operators.  Nokia  and  Xiaomi 
will  work  together  on  optical  transport  solutions  for  datacenter  interconnect,  IP  Routing  based  on  Nokia's  newly 
announced  FP4  network  processor,  and  a  data  center  fabric  solution. In addition, the companies have agreed to explore 
opportunities  for  further  cooperation,  in  areas  such  as  the  Internet  of  Things,  augmented  and virtual reality, and artificial 
intelligence.” 

Besides  the  patent  acquisition  deal,  Nokia  also  revealed  that  the  company  has  signed  a  cross-license  deal  with  Xiaomi  for  cellular 
standard-essential patents. 

Patent deal with Casio 

On  July  6,  2016,  Xiaomi  bought  patents  from  Casio,  one  of  the  most  famous  Japanese  consumer  and  commercial  electronics 
manufacturers  that  has  been  in  the  industry  for  more  than  60  years.  Casio  has  a  wide  range  of  products  from  calculators  to  musical 
instruments. They were the first company to build an all-electric calculator. 

The  patent  assignment  deal  consisted  of  ​59  US  patents  the  majority  of  which  were  covering  camera  and  image  processing 
technologies. This acquisition will surely add fuel to Xiaomi’s pursuit to enter the US smartphone market. 

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350 Patent Assignments From Phillips 

This  was  the  first  patent  related  news  that  popped  up  this  year  from  Xiaomi.  After  a  long  break  of  almost  a  year,  Xiaomi  returned  to 
their acquisition quest in August, when they acquired about 350 patents from Philips. 

IAM  media  ​reported  on  this  assignment  first  mentioning  the  lack  of  Chinese  patents  in  the  deal.  The assignment contained about 130 
US patents and dozens of patents from other countries including Japan, India, South Korea, Russia, and Turkey. 

We  analyzed  the  patents  involved  in  this  transaction  and  almost  all  of  the  assets  are  related  to  displaying  technologies,  especially 
OLEDs.  Analyzing  their  entire  portfolio  could  reveal  more  insights  about  how  this  transaction  will add value to their product line, other 
than strengthening their patent portfolio. 

Want us to dig deeper? Reach out to us here to get the full analysis conducted. 

Licensing agreement with NTT Docomo for 5G Standard Essentials 

Recently  in  September  Xiaomi  entered  into  an  agreement  with  Japanese  Telecom  giant  NTT  Docomo  for  a  global  license  of their 5G 
standard-essential  patents.  This  agreement  will  help  Xiaomi  in  building  a  5G compatible device, which most of the market leaders like 
Samsung, Apple are already working on too. 

Taking Over Meitu Hardware Business for Selfie-focused Smartphones 

In  Nov  2018,  Xiaomi  found  itself  in  another  deal  and  perhaps  it  made  things  easier  for  both  of  the  parties.  Xiaomi  ​took  over  the 
hardware business of Meitu​, a smartphone company that also has expertise in the software field as well particularly in image editing.  

As  per  the  deal,  the  future  smartphone  will  have  the  Meitu  brand  but  Xiaomi  will  be  responsible  for  the  whole  production  such  as 
research  and development, design, and sales. Meitu technology will help Xiaomi to make more selfie-focused smartphones and Xiaomi 
brand will help Meitu to enter the bigger market. 

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MI CC9 Meitu Edition​ is the first smartphone developed from their collaboration.  

The Innovation Game 

Xiaomi,  like  a  smartphone  company,  has  seen  both  ups  and  downs.  From selling 300,000 handsets a year to being the most valuable 
startup, to faltering sales, Xiaomi has seen it all. 

Considering  the  tough  competition  other  players  like  Huawei,  Vivo,  Lenovo  poses,  Xiaomi  realized  that  Global  expansion  is  the  only 
way  to  stay  ahead.  In  order  to  achieve  its  goals,  Xiaomi  has  an  actionable  IP  strategy  that  might  open  doors  to  opportunities  in  the 
global market. 

But it is worth noting that despite having a sizable portfolio; Xiaomi has not made it to its top position. Why? 

The problem with Xiaomi 

Xiaomi’s  rise  was  based  on  one  simple  advantage:  It  offered  premium  hardware  and  features  at  a  fraction  of what Apple or Samsung 
offers.  But  as  soon  as  other  Chinese  manufacturers  entered  the  market  offering  premium  specifications  at low prices, the danger was 
imminent. 

Further,  the  competitors  didn’t  just  manufacture  premium  devices  at  low  costs,  albeit  added  features  that  gave  them  an  edge.  For 
instance,  Vivo  offered  curved  screens,  LeEco  offered  Exclusive  content,  and  Huawei offered dual-lens camera and fingerprint sensors 
in its handsets. 

Xiaomi  on  the  other  side,  despite  having  a  sizable  portfolio  failed  to  take  advantage  and  that  serves  as  one  reason  beneath  its small 
market share. 

A strong portfolio, a huge fan base, holds over some pretty strong markets, what should Xiaomi do next to emerge as a leader? 

Leverage its IP and Innovate. That is how Xiaomi could up its game. 

   

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Key Takeaways from the Analysis 
Xiaomi’s  expansion  plan  would  be  incomplete  if  it  fails  to get a hold over the US and European markets. The US, being an IP-intensive 
economy, would require some strong patents from Xiaomi to allow invasion in its markets. 

Though  Xiaomi  had  been  taking  steps  toward  reaching  its  goal,  the  road  ahead  isn’t  really  easy.  With  President  Trump  insisting  on 
manufacturing  products  in  the  US  itself  and  Huawei  ban,  Xiaomi  might  lose  the  low-cost  advantage  it  offers  if  it  has  to  start 
manufacturing its products in the US once it enters the market. 

No  matter  what  the  case,  US  Expansion  or  not,  Xiaomi  won’t  become  a market leader if it continues to play on its low-cost advantage. 
Rather, it should take advantage of its beefed-up portfolio and bring innovative products to market that would ensure its success. 

Innovation is the key. 

Authored By: Nitin Balodi, ​Team Lead - Market Research​ ​and ​Shabaz Khan, ​Sr. Research Analyst - Market Research 

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