Microsoft and Xiaomi have announced that the companies have reached an agreement that will see the companies cross-license patent portfolios, as well as pre-load Skype and Microsoft Office on future Xiaomi Android phones and tablets. Details on exactly which patents from each company are to be licensed were understandably not revealed, but we do know that apps will arrive on new phones sold starting in September 2016.

Xiaomi Mi 5

The deal, which was announced both on Twitter by Xiaomi's Hugo Barra and in a press release from Microsoft, was summed up nicely by Xiang Wang, senior vice president at Xiaomi:

We are excited to be working closely with Microsoft on a broad technology collaboration partnership. As demonstrated by this agreement with Microsoft, Xiaomi is looking to build sustainable, long-term partnerships with global technology leaders, with the ultimate goal of bringing the best user experience to our Mi fans.

Microsoft has struck plenty of app pre-load deals with other manufacturers — most notably Samsung starting with the Galaxy S6 — and has also managed to work out patent cross-licensing deals with others, particularly in lieu of payments for direct licensing of Microsoft's intellectual property.

As you'd expect, this deal seems beneficial for both parties.

Microsoft will soon have its leading apps pre-installed on phones and tablets coming out of one of the biggest phone and tablet manufacturers in the world, which is a large part of Microsoft's current strategy. At the same time, Xioami may be able to leverage this patent licensing deal to launch its devices in more regions, such as Europe and North America, where the threat of litigation is higher — the company's success, as great as it is, is currently limited primarily to Asia, India and Brazil.