5G, because Huawei will ask for royalties from Apple and Samsung
Chinese hi-tech giant Huawei has announced that it will charge cell phone makers a royalty for using its patented 5G technology. Here are numbers, details and comments
Huawei will start demanding 5G royalties from Apple and Samsung.
The Chinese company has published a white paper on innovation and intellectual property (IP) at its headquarters in Shenzhen, claiming that it has become one of the largest patent holders in the world thanks to sustained investments in innovation.
The Chinese giant has been under pressure in recent times. In 2019, Huawei was placed on a US blacklist called Entity List which prevented American companies from exporting certain technologies to the Chinese company. Last year, Washington moved to cut Huawei from key chip supplies. The latest offensive came last Friday, when the Federal Communications Commission (FCC) finally ruled that five Chinese companies pose a security threat. Among these Huawei.
As a result, the Chinese giant ran for cover by increasing its research and development efforts.
And now Huawei will charge mobile giants like Apple and Samsung a "reasonable" fee for accessing its 5G wireless patent mine, potentially creating a lucrative revenue stream. Charging royalties on key patents related to mobile 5G technology could help Huawei recoup at least some of the revenue hit in other areas of its business, such as smartphones, following US sanctions.
Huawei executives also stressed that US sanctions should not affect its ability to cross-license with US companies because those patents are publicly available.
All the details.
HUAWEI WILL CLAIM ROYALTY FOR ITS 5G TECHNOLOGY
Chinese tech giant Huawei wants to license its patent-protected 5G technology to other large-scale smartphone makers. The announcement came yesterday from the Shenzhen giant.
2.5 DOLLARS FOR EVERY 5G SMARTPHONE
The license fee is based on the phone's retail price and is capped at $ 2.5 per device, the company said.
This price is lower than some of Huawei's competitors, including Finnish tlc company Nokia, Cnbc points out. In 2018, Nokia said the licensing fee for its 5G SEP (standard essential patent) wallet will be capped at 3 euros ($ 3.58) per device. Ericsson said it will charge $ 2.50 to $ 5 per device.
HOW MUCH WILL IT FRUIT AT THE SHENZEN COLOSSUS
Huawei estimates it will receive $ 1.2 to $ 1.3 billion in patent licensing revenue between 2019 and 2021.
The Chinese company has 3,007 declared 5G patent families, more than any other company in the world, according to analysis by intellectual property research organization GreyB.
MORE THAN 100,000 ACTIVE PATENTS
At the end of 2020, Huawei said it holds more than 100,000 active patents in more than 40,000 patent families around the world.
Last year, the company filed 5,464 international patent applications, nearly double that of its closest competitor, South Korean Samsung.
In 2008, the World Intellectual Property Organization ranked Huawei in first place in terms of the number of patent applications filed for the first time under the Patent Cooperation Treaty. In 2019, the company ranked 2nd in Europe and 10th in the United States in terms of the number of patents granted.
THE EXAMPLE OF QUALCOMM WITH APPLE
As Bloomberg pointed out, companies like Qualcomm thrive on charging royalties on the technology they provide to customers like Apple. The two mobile giants clashed bitterly over what Apple called an unfair $ 7.50 royalty from each iPhone, which Qualcomm defended as a small price to pay for the core technology. ( Here is Start's insight into how much peace with Qualcomm on patents will cost Apple) .
THE HUAWEI STRATEGY
The Shenzen giant intends to reinvest patent fees in research to maintain its position in wireless networking relative to Ericsson and Nokia.
HOW MUCH IT HAS INVESTED IN RESEARCH AND DEVELOPMENT
Huawei's R&D investment was 131.7 billion yuan ($ 20.3 billion) in 2019.
By making the licensing model for its 5G technology public, Huawei aims to provide the industry with a more transparent cost structure, said Song Liuping, the company's chief legal officer. This move would support businesses in their investment decisions for 5G and digital transformation, he added.
Huawei has repeatedly been accused, especially in the United States, of illegally using the intellectual property of Western companies. At the Huawei event in Shenzhen, Francis Gurry, the former director general of the World Intellectual Property Organization (Wipo), contradicted this assertion.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/5g-perche-huawei-chiedera-royalties-a-apple-e-samsung/ on Wed, 17 Mar 2021 08:27:50 +0000.