Xiaomi and Microsoft have announced a deal that will move the companies a little closer together, while giving Xiaomi a slightly less treacherous path for expansion into Western markets. Xiaomi is buying some Microsoft patents, and the two companies have inked a cross-licensing deal for patents, and, like many vendors, Xiaomi is committing to bundle Microsoft apps on its Android phones. Wang Xiang, senior vice president at Xiaomi, describes the deal as "a very big collaboration agreement between the two companies."

The most surprising part of the announcement is that Xiaomi is buying (not licensing) 1,500 patents from Microsoft. Reuters notes that the patents include "voice communications, multimedia and cloud computing." Microsoft licenses its computing patents to most Android OEMs, and the deal often includes bundling Microsoft apps with future devices. Outright sales of some of the patents has not happened previously, however.

The app bundling part of the deal seems pretty standard for these agreements. The press release notes that, starting in September, "Xiaomi Android devices, including Mi 5, Mi Max, Mi 4s, Redmi Note 3 and Redmi 3, will come pre-installed with Microsoft Word, Excel, PowerPoint, Outlook, and Skype applications."

Xiaomi—despite being heavily invested in Android skin with its MIUI skin—hasn't been afraid to team up with Microsoft and experiment with Windows. The two companies offered an aftermarket Windows "conversion" for Xiaomi's flagship Mi 4, and Xiaomi even sells its Mi Pad 2 tablet with a Windows 10 option. The two companies are calling this deal an "expansion" of their partnership.

Xiaomi sells smartphones in China, Taiwan, Hong Kong, Singapore, Malaysia, Philippines, India, Indonesia, and Brazil but has been eyeing an international expansion. It currently has an accessory store in the United States, but selling smartphones in the West means diving into the smartphone patent war. Xiaomi has been gearing up to do battle—it filed for 3,700 patents last year, and this Microsoft alliance just placated one potential legal adversary.

Xiaomi's strength in the smartphone market is delivering devices with "bang for your buck," usually offering phones with specs and build quality much higher than the price would suggest. Licensing patents can be pricey, though—Samsung pays Microsoft $1 billion a year for its Android devices. Right now Xiaomi is definitely saving money by staying out of the more litigious Western countries.

In its move to the West, can Xiaomi license all the patents it needs to, fight all the inevitable legal battles that will come up, and still offer lower prices than the competition?