start a company Huawei is imposing royalties on smartphone makers in exchange for using its patented 5G technologies, as the Chinese tech company is looking to provide a new source of revenue, even as other parts of its business are damaged by US sanctions.
The company said: It charges a reasonable royalty fee of the phone’s sale price, with a $ 2.50 per unit ownership cap for smartphones capable of connecting to 5G networks and previous generations of mobile phone networks.
The price is lower than some of Huawei’s competitors, including the Finnish telecommunications company Nokia.
Imposing royalty fees on key patents related to cellular technology could help Huawei offset at least part of the revenue that has been damaged in other parts of its business, such as smartphones, as a result of US sanctions.
And when a new generation of cellular technology is developed, so-called global standards must be established, which are protocols, technical specifications and design that allow interoperability between fifth generation networks worldwide and allow smart phones to connect to these networks.
Standards bodies are mandated to create these global standardsCompanies such as Huawei, Nokia, Ericsson, Qualcomm, and many others contribute to the standards development process.
By doing so, these companies create technologies that they then obtain, and patents, critical to the 4G or 5G standards, are considered a standard core patent, or SEP.
And if the smartphone maker wanted to launch a 5G phone, it would likely need to use a standard base patent for one or more of these companies, and in return, these companies could ask for an ownership fee.
Huawei has 3007 patents declared for 5G networks, the highest percentage of any company in the world.
It is estimated that about 18.3 percent of Huawei’s 5G patents are a standard base patent in use.
Huawei’s ownership ceiling of $ 2.50 per unit is at its lowest compared to its competitors, which Nokia charges $ 3.58 per device, while Ericscon charges between $ 2.50 to $ 5 per device.
Huawei has charged companies for its 4G patents, and the Chinese company estimates that it could receive revenues of between $ 1.2 billion and $ 1.3 billion from licensing the patents between 2019 and 2021.
Huawei wasn’t aggressive in the past about intellectual property fees or litigation, but that could change now There are signs the company is becoming more aggressive in its intellectual property lawsuits.
And last year, Huawei filed lawsuits against Verizon, alleging that the US telecom company violated the patents held by the Chinese telecoms giant.