Nokia and Xiaomi on Wednesday announced business collaboration agreement and a multi-year patent agreement which includes cross licensing for each company's cellular standard essential patents. Under the new business agreement, Xiaomi also acquired patent assets from Nokia.

The Finnish firm, which focuses on telecommunication network equipment, will likely help its Chinese partner gain technological advancements, and help it with its operations in over 30 countries. Apart from smartphone business, the agreement will also benefit Xiaomi with its Internet of Things (IoT) ecosystem which the Chinese company claims crossed over 60 million connected devices. Xiaomi claims that there are now over 8 million daily active connected devices on the Mi Ecosystem platform.

The new partnership between Xiaomi and Nokia will mean that the latter will offer network infrastructure equipment usually required by large Web providers and data centre operators. The partnership will also mean that both Nokia and Xiaomi will work together on optical transport solutions for data centre interconnect, IP routing based on Nokia's newly announced FP4 network processor, and a data centre fabric solution.The agreement follows a partnership announced in February this year for Xiaomi's 'private cloud' network

Both the companies will also be working on areas like Internet of Things, augmented and virtual reality (or AR and VR), and artificial intelligence (AI).

Commenting on the agreement, Rajeev Suri, President and CEO of Nokia said, "Xiaomi is one of the world's leading smartphone manufacturers and we are delighted to have reached an agreement with them. In addition to welcoming such a prominent global technology company to our family of patent licensees, we look forward to working together on a wide range of strategic projects."

Lei Jun, Chairman and CEO of Xiaomi also commented on the partnership, saying, "Our collaboration with Nokia will enable us to tap on its leadership in building large, high performance networks and formidable strength in software and services, as we seek to create even more remarkable products and services that deliver the best user experience to our Mi fans worldwide."

Separately, a report claims that Xiaomi may have got its first smartphone brand partner for its in-house SoC chipset dubbed Surge S1.

According to PhoneArena's report, HMD Global and Xiaomi have signed a deal which will mean that a future Nokia smartphone will feature Surge S1 SoC. Unfortunately, there's no word when we will get to see first phone featuring Xiaomi Surge S1 SoC.

It's worth mentioning that the deal between HMD Global and Xiaomi is separate from the Nokia and Xiaomi partnership.