Microsoft wants its apps to be present in all smartphones and has thus struck a strategic partnership with Lenovo. This partnership aims to embed Microsoft’s productivity apps in Lenovo’s smartphones. Apps such as Office, Skype and OneDrive will be available on phones that are powered by the Android operating system (OS).
The strategic partnership is a result of a patent cross-licensing agreement between the two companies. The patent deal will cover Lenovo as well as Motorola in the future. With Lenovo expected to ship millions of smartphones in the coming years, Microsoft’s decision to pre-install its apps in the Chinese company’s smartphones will help to expand its users base.
This is not the first time that Microsoft has struck a deal with a mobile manufacturer to pre-install its apps and services on their smartphones. In the past, it has inked similar deals with Samsung, Sony, LG, Xiaomi and Asus. As for the patent deal, no details were shared by either company except that it is a part of Microsoft’s Intellectual Property Program that was initiated in 2003.
Since the program started, Microsoft has made more than 1,200 licensing agreements. Through patent cross-licensing agreements, Microsoft will waive off the royalty fee that it usually charges phone makers to preinstall its apps on their smartphones. CEO Satya Nadella outlined that the company wants to keep more users engaged by inking such deals.
The deal comes a week after Lenovo posted strong first-quarter earnings driven from the sale of its Beijing property. However, the decrease in smartphones sales was unexpected, which was down by 31% on a year-over-Year (YoY) basis.
In April, Lenovo dropped out from the list of top five smartphone manufacturers, according to a study by IDC. The acquisition of Motorola has not paid dividends for the company. Moreover, it does not expect to make money from its mobile division any time before October 2017. Revenue from Mobile Business Group was down 6% YoY to $1.7 billion. So it seems like the deal with Microsoft could be beneficial for Lenovo as it could increase its smartphone sales.