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As all of us know Xiaomi phones run either on Mediatek or Qualcomm. Xiaomi and Qualcomm have entered into a new 3G and 4G China patent license agreement. Xiaomi has agreed to pay Qualcomm a royalty on devices it sells that can connect to 3G and 4G cellular networks. Under the terms of the agreement, Qualcomm has granted Xiaomi a royalty-bearing patent license to develop, manufacture and sell 3G (WCDMA and CDMA2000) and 4G, including 3-mode (LTE-TDD, TD-SCDMA and GSM), complete devices. The royalties payable by Xiaomi are consistent with the terms of the rectification plan submitted by Qualcomm to China's National Reform and Development Commission.

Qualcomm is one of the world�s foremost licensees of patents related to cellular technology. According to analysts, the company has 170 patents related to long-term evolution (LTE) cellular technology alone, and in its last fiscal year, generated $8.2 billion on patent royalties for cellular communication. That figure was up from $7.9 billion in the previous year.

Ownership of the basic methods that chips inside mobile devices use to connect to cellular networks are a critical piece of Qualcomm�s patent portfolio. If a device can connect to a cellular network on just about any mobile phone service around the world, a small royalty is technically required to be paid to Qualcomm for that right.