Huawei plans to start charging big smartphone-makers like Samsung and Apple royalties for use of its various 5G-related patents, according to CNBC.
Huawei is seeking to make up some of the losses it has experienced as a result of the US government’s moves to sanction the company and limit its ability to sell products in the American market. The US government says national security concerns have driven the policy.
Apple and Samsung would each have to pay up to $2.50 per smartphone sold, with Huawei promising to cap it there and keep rates lower than competitors like Qualcomm or Nokia. For example, Nokia has capped its licensing rate at around $3.58 per unit.
Huawei expects to fetch between $1.2 and 1.3 billion in total fees for 2019 through 2021, though that figure includes more than just the 5G royalties discussed here.
An intellectual-property research firm called GreyB is cited by CNBC as claiming that Huawei has the largest number of declared 5G patent families of any company, at 3,007, and that 18.3 percent of those are in use.
Samsung and Apple will be Huawei’s biggest sources for 5G patent revenue at least in the near term, as they are currently the top two smartphone companies in the world, and both have overhauled their lineups to focus on 5G phones over the past year.
Before the US sanctions and other developments, Huawei was second to Samsung in the smartphone marketplace. But by the end of 2020, Huawei fell to third, and Apple took its place.
5G’s rollout is still nascent throughout much of the globe, and today’s 5G smartphones have drawbacks like relatively poor battery life. But industry analysts maintain a general consensus that 5G will be one of the primary technologies driving sales, revenue, and adoption throughout the tech industry in the coming years.
For that reason, 5G patents are expected to be quite valuable moving forward.
Both Apple and Samsung use 5G modems made by Qualcomm at present, but Huawei’s patents are still in play. Apple plans to develop its own modems to replace Qualcomm’s in future iPhones, but it is likely to still depend on patents by companies like Huawei and Qualcomm to deliver 5G connectivity.
