Huawei will soon be charging Apple and Samsung to pay royalties for using its 5G patents, allowing it to create a new revenue stream for its wireless technology innovations. The company has already been blocked out of a few markets, which has impacted its revenue streams, but negotiating an on-going licensing deal with giants like Apple and Samsung should help it maintain a steady revenue.
Huawei might charge a patent fee of $2.50 per phone to Apple and Samsung
As per Bloomberg, Huawei aims to negotiate a licensing fee that would be lower than what companies like Qualcomm, Nokia, and Ericsson charge. As per estimates, the patent and licensing fees could bring in almost $1.3 billion between 2019 and 2021 for Huawei, which amounts to around $2.50 per phone. On the other hand, Qualcomm charges around $7.50 per smartphone, which is three times higher.
While the fee will be a maximum of $2.50 per smartphone, Huawei intends to charge different fees depending on product type and nature, such as smart cars and other wireless 5G capable products. Huawei has been one of the biggest players for 5G networking but has been pushed back due to sanctions by the United States. These sanctions mean that Huawei has been unable to expand its smartphone business in newer markets like the U.S., and has also faced issues in other countries such as the UK, where its 5G kits have been facing bans.
Along with Samsung and Apple, other smartphone manufacturers like Xiaomi and Oppo could mean that Huawei’s largest pool of 5G patents in the world could be put to good use, and potentially force Qualcomm to reduce its fees.
Companies like Samsung and Apple rely on 5G networking technologies from the likes of Qualcomm at the moment. Apple has been working on developing its 5G modem, which is rumored to launch by 2023 in future iPhones, however, it is unclear how the company will tackle the existing set of patents on the technology held by Qualcomm, Huawei, and others. Whether Apple will enter into cross-licensing deals with Huawei is yet to be seen.
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