To strengthen its partnership with China-based Xiaomi in the mobile device market, Intel has provided special deals to the China-based vendor. For every notebook processor Xiaomi purchases, Intel is giving away a free tablet processor, according to sources from the upstream supply chain.

Intel has been competing in the mobile device market against Qualcomm, MediaTek and China-based chip designers for several years, but is still seeing difficulties raising its market share. In addition to giving preferential pricing to clients with large orders, Intel has also cooperated with Rockchip and invested in Spreadtrum, looking to expand its presence.

Xiaomi has become a major client that Intel is eagerly trying to secure. Following the adoption of Intel's Atom X5-Z8500 in its Xiaomi Tablet 2 launched in late-November, Xiaomi's upcoming notebooks are expected to use Intel's Haswell-based Core processors.

With Intel's discounts and Inventec's assistance, Xiaomi's notebooks have become competitive in both pricing and quality which will allow the China-based vendor to step on an equal footing against first-tier vendors such as Lenovo, Asustek Computer and Acer.

Although Xiaomi only has limited shipments at present, Intel is still willing to provide discounts and R&D assistance because of Xiaomi's 70 million annual smartphone shipments and is hoping Xiaomi will place orders for Intel-based smartphone solutions in the future.

Since Xiaomi has also been aggressively expanding its smart home Internet of Things (IoT) supply chain, Intel's partnership with Xiaomi may help the CPU giant to quickly expand into China's IoT market.