Chinese smartphone giant Xiaomi has announced it will purchase 1,500 of Microsoft's patents, many of those related to mobile software, as it marks the next step in its pursuit of Western expansion. The financial terms of the deal were not disclosed.

While the Android maker dominates its home market with an intimidating 26% share of the fast-growing scene, intellectual property challenges inhibit its ability to grow as quickly outside.

In 2014, Ericsson sued Xiaomi in India, and a Delhi High Court judge banned Xiaomi from selling some of its devices in the country.

Since then, Xiaomi has been trying to broaden its patent portfolio, inking deals with Qualcomm for instance, as it navigates the tricky minefield of Android royalty payments.

Squeezed at home both from low-end and high-end Android makers, it makes sense for Xiaomi to invest its sizeable R&D might toward expanding its product offerings, and reaching a bigger audience.

Its recently unveiled Mi Drone, for example, is set to target DJI, which so far has dominated the aerial photography scene. Xiaomi's new drone does what Xiaomi does best — bringing the price point down while maintaining comparable specs to the competition.

Xiaomi makes rice cookers, too. This is its CEO, Lei Jun, showing one off on stage. Image: AP

Microsoft Office on every Xiaomi

Along with the patent-licensing agreement, Xiaomi also announced on Wednesday it has agreed to pre-install Microsoft Office and Skype on its devices, allowing Microsoft's bread-and-butter products to reach tens of millions of Xiaomi users in Asia.

For Microsoft, it's just another confirmation that the company has all but given up on pushing people over to Windows phones; instead, it's trying to be more present on iOS and Android devices.

Starting from September this year, Xiaomi's Mi 5, Mi Max, Mi 4s, Redmi Note 3 and Redmi 3, will come with Microsoft Word, Excel, PowerPoint, Outlook and Skype apps loaded on them.

Xiaomi has an existing relationship with Microsoft, with its Mi Cloud service relying on Microsoft Azure servers.

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