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Nokia and Xiaomi sign patent licensing deal; agree to explore virtual reality and IoT

On top of cross-licensing patents from each other, Nokia and Xiaomi will “explore opportunities for further collaboration” in areas such as virtual reality, artificial intelligence and internet of things

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No financial details of the agreement were provided, but analysts don’t expect it to be particularly significant for Nokia at least

Finnish telecoms giant Nokia and Chinese smartphone maker Xiaomi have inked a patent licensing agreement.

The deal will see both companies cross-license so-called standard essential patents from each other, which will help them to develop new products.

In short, these patents are essential to allow products to comply with an industry standard.

Nokia will also provide network infrastructure equipment to Xiaomi, while the two will work together to develop technologies focused on the data center, internet of things and virtual and augmented reality.

“Xiaomi is one of the world's leading smartphone manufacturers and we are delighted to have reached an agreement with them,” said Nokia chief executive Rajeev Suri.

Even though its influence has declined in recent years, Nokia has been a key player in developing many of the standards still used in the mobile industry today.

Because of this, its patents are still extremely valuable to companies looking to expand globally in the mobile market without getting caught up in any legal troubles.

Xiaomi fits that description. Like Nokia was in Europe, Xiaomi was once the big cheese in China but has faded away in recent years under pressure from newer entrants into the smartphone market. As such, it’s looking to expand its business into other markets.

Nokia already has deals with the likes of Apple Inc (NASDAQ:AAPL) and Samsung, but this is its first deal with a Chinese phone manufacturer.

It’s not a one-way street though as Xiaomi also has its own catalogue of 4,000 patents, of which almost half are overseas.

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