Microsoft, Lenovo Partner in China on R&D

Microsoft and Lenovo announced an agreement Wednesday that will combine their research and development efforts in the consumer and mobile technology sectors. The announcement comes as Chairman Bill Gates arrived in China to hold talks with government leaders.

The company is in China to strengthen its ties with the Communist nation even as tension increase between Beijing and Washington. Microsoft sees the country as a new growth opportunity, and is working with the government and local companies to promote its products.

Lenovo is one of the biggest of the computer manufacturers in China, with a little over a third of the market there. Partnering with the company makes sense for Microsoft if it wishes to reach a large segment of the Chinese population.

Microsoft and Lenovo will have a 50 percent stake in a research center in Beijing at Lenovo's corporate campus. It is the first time that Redmond has teamed up with another corporate entity on such a project.

Intellectual property of the two companies will be mutually shared, and continues a partnership between the companies. In 2005, Lenovo agreed to pre-install Windows on PCs within China to fight piracy, and the companies collaborated on a low-cost PC for the developing world through the Flexgo program.