Huawei plans to demand royalties from smartphone manufacturers that exploit its patented 5G technologies in the near future. The Shenzhen-based firm is seeking $2.5 per smartphone equipped with Huawei-stamped 5G technology. The brand hopes to pocket up to $1.3 billion.
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As you probably know, Huawei’s financial situation is not at its best. As a result of trade sanctions imposed by the Trump administration, the automaker saw sales of its smartphones plummet in 2020. These difficulties are expected to continue in 2021, while some analysts expect sales to fall by 42% this year.
In the field of 5G, Huawei is doing little better. Many countries have decided to exclude Huawei 5G equipment, as have Sweden and the United Kingdom. In France, all Huawei equipment must be gone by 2028. In fact, there is an urgent need for the brand to find new sources of revenue, such as the cloud, autonomous automobiles, or the development of technological solutions for pig farming and coal mining.
However, we learn on Tuesday, March 16, 2021 that Huawei intends to demand soon the levy of a fee from smartphone manufacturers. The principle? Claim $2.5 in royalties for each smartphone that uses 5G technologies manufactured and patented by Huawei.
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Between 1.1 billion and 1.3 billion potential profits
Through this process, the Shenzhen-based firm hopes to pocket between $1.1 billion and $1.3 billion. Enough to allow the company to put its finances back in the green for a while. The payment of this fee will relate to patent and licensing fees issued between 2019 and 2021 and relating only to 5G technologies.
It should be noted that this practice is not new. Nokia, Ericsson and Qualcomm are also claiming royalties from manufacturers for every smartphone that carries one of their technologies. In order to motivate manufacturers to purchase from Huawei, the Chinese company said that these prices were lower than those charged by its competitors.
It is true that Nokia charges 3 euros per smartphone, while Ericsson charges between 3 and 5 dollars per device. As GreyB, a U.S. research firm, points out, 18.3% of Huawei’s 5G patent families are MS (patents essential to a standard, in this case 5G) in use. Huawei is therefore absolutely right to claim these royalties.
Source: Cnet
