But Xiaomi is embroiled in intellectual property disputes in several overseas markets. Having a Windows-based device will make it easier to enter many markets including India and Singapore, where Microsoft has a well-established ecosystem to protect its partners.

Gene Cao, a senior researcher at Forrester Research Inc, said Xiaomi can take advantage of the partnership to enter countries that are questioning the Chinese company's information security.

In the meantime, Microsoft is making some serious improvements when it comes to teaming up with Chinese manufacturers.

The company kicked off its first international hardware event in Shenzhen on Wednesday after a seven-year gap. The software giant is seeking support from Chinese manufacturers to boost the presence of Windows devices.

Lenovo Group Ltd, the world's top personal computer maker, announced it will release Windows 10-based handsets later this year. The company also produces Android-based phones.

Analysts said that with more companies joining Microsoft's ecosystem, the product differentiation will enable Windows to gain more customers.

Door closing on Explorer after 19 years

Microsoft Corp is saying goodbye to Internet Explorer, its 19-year-old Web browser.

The company is unveiling a development plan for the next-generation browser, which is now called Project Spartan, said Chris Capossela, marketing head of Microsoft.

The process of eliminating IE could be a long one. At a Microsoft Windows 10 event held in Shenzhen, Guangdong province, the lowercased "e" icon is still visible on the toolbar. Microsoft is likely to keep the IE on Windows 10, its newest operating system for enterprise compatibility. But users will be given a brand new software to surf online.

IE has received negative reviews for years. Many Windows users abandoned IE for other browsers such as Firefox, Chrome and Safari. According to online data tracker #, the 360 browser, developed by Qihoo Technologies Co Ltd, has nearly 28 percent of the market in China.