Huawei to cost royalties to smartphone makers utilizing its 5G tech

A smartphone with the Huawei and 5G community emblem is seen on a PC motherboard on this illustration image taken January 29, 2020.

Dado Ruvic | Reuters

GUANGZHOU, China — Huawei will start charging smartphone makers a royalty to make use of its patented 5G expertise because the Chinese language expertise agency appears to be like to open a brand new income stream, at the same time as different components of its enterprise have taken successful as a result of U.S. sanctions.

The corporate mentioned that it’ll cost “an inexpensive proportion royalty price of the handset promoting value, and a per unit royalty cap” at $2.50 for smartphones able to connections to 5G and former generations of cell networks.

This value is decrease than a few of Huawei’s rivals together with Finnish telecoms firm Nokia.

Charging royalties on key patents associated to mobile expertise might assist Huawei make up no less than a part of the income hit in different components of its enterprise, resembling smartphones, because of U.S. sanctions.

Up to now, Huawei has charged royalties to firms resembling Apple.

5G patents and the way they work

Huawei and 5G patents

Huawei has 3,007 declared 5G patent families, the highest out of any company in the world, according to analysis by intellectual property research organization GreyB. Patent families are a group of same or similar patents filed in different countries.

GreyB estimates that around 18.3% of those Huawei 5G patent families are SEPs that are in use, more than any other company.

The other top patent holders are South Korean firms Samsung and LG Electronics, Nokia, Ericsson and Qualcomm.

Huawei’s $2.50 cap on royalties for smartphone makers is on the lower end compared to its rivals.

In 2018, Nokia said the licensing rate for its 5G SEP portfolio will be capped at 3 euro ($3.58) per device. Ericsson said it will charge $2.50 to $5 per device.

Huawei has charged royalties for companies for its 4G patents. The Chinese firm estimates it will receive about $1.2 billion to $1.3 billion in revenue from patent licensing between 2019 and 2021.

In the past, Huawei has not been very aggressive on royalties or litigation. But that could now change.

“The reason for that is first of all Huawei’s position in the world, in a lot of countries, Huawei has been facing tough challenges selling their products,” said Muzammil Hassan, head of the intellectual property licensing and commercialization department at GreyB.

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