Huawei will start charging competing phone makers for using its 5G patents

nanoguy

Posts: 741   +12
Staff member
Cutting corners: Huawei may not be able to sell as many phones as it could if it wasn't on the US Entity List, but the company does plan to profit from its extensive portfolio of 5G patents. The company is also open to cross-licensing agreements with American tech giants, although that option is looking increasingly unlikely.

Huawei was hit by US sanctions back in 2019 as a result of growing trade tensions with China, but that didn't have an immediate effect on the company's growth. A year later, Huawei managed to briefly surpass Samsung in the number of worldwide smartphone shipments, but only because of China's relatively quick economic recovery after pandemic-related lockdowns.

The Chinese company mostly mitigated the initial blow dealt to its business right up until it lost access to several key hardware and software suppliers, most notably TSMC and Google.

But after burning through most of its stockpile of American chips and losing some lucrative 5G deployment contracts, it's been forced to divest one of its sub-brands, create a makeshift clone of Google's Android operating system, and even explore alternative revenue streams such as AI-enhanced pig farming.

According to a Bloomberg report, Huawei is looking to make up for all the lost revenue and then some. The Chinese company owns the world's largest portfolio of 5G patents (3,007), which is why it has decided to start charging companies like Apple and Samsung for their use in mobile products.

Jason Ding, who leads Huawei's IP Rights Department, explained during a conference at the company's Shenzhen headquarters that Huawei will charge a reasonable royalty rate as a percentage of a handset's selling price, but also capped at 16 yuan (around $2.5), which is lower than what other patent holders like Qualcomm, Nokia, and Ericsson charge per device.

Huawei estimates that revenue derived from patent licensing fees between 2019 and 2021 will be come to between $1.2 billion to $1.3 billion, although it didn't offer a breakdown for what technologies are covered by those patents. This will go towards Huawei's R&D efforts, some of which are focused on the next generation of mobile networks.

Must read: Not all 5G is the same

At the same time, the company will pursue cross-licensing agreements with interested parties, but Ding didn't go into any specifics. He did, however, explain that US sanctions shouldn't impede any such negotiations, which is rather optimistic considering the recently amendments made by the Biden administration. Moreover, Ding believes the decision to charge relatively low royalty rates will lead to a win-win situation where 5G adoption accelerates thanks to a "more transparent cost structure" for companies that deploy the new networks.

In the meantime, Huawei isn't sitting idle -- the company is using strong government backing to build a chip manufacturing plant in Shanghai, which is key to ensuring its long-term survival. If Ericsson estimates are right, no less than 3.5 billion people will have 5G handsets by 2026, which means Huawei might just weather the storm after all.

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yRaz

Posts: 3,605   +3,525
"patents"
you mean security flaws?
15% isn't that large and I'm fine not doing business with them. And most of the companies on that list aren't even technically US based companies.
 

Daniele 00

Posts: 91   +77
I dont understand the scope of this article.

as quoted "" (...) which is lower than what other patent holders like Qualcomm, Nokia, and Ericsson charge per device."" Huwaei is not the only company having revenues from patens. Also they are charging less then other companies, which should be a positive thing.

How excactly the Huawei practise of getting a revenue over the licenses, practise that other company did too, is linked with the past USA sanctions ? this I dont understand. Could the author of article explain to me? thank you (without malice)
 

Austinturner

Posts: 134   +133
That is like saying someone owns the best cheap TV shop in the area. Meanwhile, if you could go back in time you could catch said person leaving your house throug the window with your tv.
A thief yesterday, a respected 5g seller today.
So, is there evidence huawei stole any 5g technology and did not develop it from their own research and engineering work? I haven’t seen that accusation made from any credible source.
 

Reehahs

Posts: 1,161   +796
That is like saying someone owns the best cheap TV shop in the area. Meanwhile, if you could go back in time you could catch said person leaving your house throug the window with your tv.
A thief yesterday, a respected 5g seller today.
Sorry, your analogy still doesn't apply.

Giving away old monochrome TV and then getting mad when they build a better colour TV is what has happened here.