Home IT News With Its 5G Patents, Huawei Wants To Go Up The Slope

With Its 5G Patents, Huawei Wants To Go Up The Slope


In great difficulty following the American sanctions, the Chinese giant wants to go up the slope thanks to its 5G patents bypassing manufacturers and equipment suppliers to the cash register.
Huawei may be holding its secret weapon to get out of the rut into which the US administration has pushed it. While Huawei was only a year ago the biggest seller of smartphones in terms of device sales volume, US sanctions that now cut its devices from compatibility with Android and Google services have led to a tumble in its sales. To redo the icing, the Shenzhen firm now sees its 5G patents as the best way to earn revenue directly from manufacturers of 5G phones and equipment.
Huawei will thus begin to charge fees qualified as “reasonable” to Apple and Samsung for the use of its some 3,000 5G patents in their smartphones. In a statement released on Tuesday, the Chinese giant estimated that it could earn revenues of around $ 1.2 billion to $ 1.3 billion from its rivals for patent license fees operated between 2019 and 2021. Jason Ding, head of Huawei's intellectual property rights department, has just declared that the Chinese giant will provide a "reasonable royalty rate as a percentage of the handset's selling price, and a royalty cap per unit at 2.5 dollars”.
The charges would apply to smartphones that can connect to 5G and previous generation mobile networks. For Huawei, it is clearly a question of compensating for the shortfall following the sanctions imposed by the American authorities, which since 2019 have deprived it of all access to the technologies of American giants like Google and Qualcomm sanctions with terrible consequences for the Shenzhen firm. Huawei has only shipped 32 million smartphones in the fourth quarter of 2020, against 81.8 million for Apple iPhones, according to the latest figures from Canalys.

Free fall Sales

Worse, over the whole of 2020, Huawei shipped 188 million smartphones - including through its recently sold low-cost brand Honor - against 240 million devices in 2019. The Chinese giant intends to get paid for its 5G patents, despite the United States blocking its supply of American technologies. The Shenzhen firm, however, has promised to charge lower fees for its patents than its network rivals Ericsson and Nokia.
Huawei says U.S. sanctions shouldn't prevent it from entering into cross-licensing deals with U.S. companies. “Huawei has been the largest technical contributor to 5G standards, and follows fair, reasonable and non-discriminatory principles in patent licensing,” defends the Chinese giant's staff. "We hope that the royalty rate we announced today will increase 5G adoption by giving 5G implementers a more transparent cost structure that will inform their investment decisions going forward," adds Jason Ding.
Last month, Huawei filed a lawsuit against the US telecommunications constable, the FCC, for labeling the company as a national security threat in June 2020, blocking rural network companies that were using FCC funds to buy company equipment.
Although deemed less radical than the Trump administration, Joe Biden's team did not give Huawei much more respite than that of its predecessor in the White House. Last week, the Commerce Department imposed stricter restrictions on U.S. companies with licenses to supply equipment to Huawei.