Chinese tech giant Huawei has said it will begin charging smartphone makers royalties of up to $2.50 for each 5G-enabled handset they sell that uses its patented 5G technology.
Huawei is the world’s largest owner of 5G patents, hence global smartphone giants like Apple, Samsung and others are likely to pay 5G-related royalties to Huawei.
Chinese media quoted Huawei’s head of Global Intellectual Property, Ding Jianxin as saying at a press conference that Huawei has set the royalty for its 5G SEPs to up to $2.50 for each device, adding that “the royalty will be charged based on the sales price of the handset at a reasonable rate.”
“Huawei will negotiate royalty rates and possible cross-licensing of patents with Apple and Samsung,” Huawei Chief Legal Officer Song Liuping was also quoted as saying.
This, according to reports, could potentially opening a new revenue stream for the company as its smartphone sales dips drastically due to US sanctions.
Indeed, Huawei said in a statement that it expects to earn between $1.2 billion and $1.3 billion from its intellectual property inventory, but it didn’t say how much of it will come from its 5G patents.
According to intellectual property research firm, GreyB, Huawei has declared ownership of at least 3,007 5G patent portfolios — groups of the same or similar patents filed in different nations,
GreyB said around 18.3% of Huawei’s patent filings are considered “essential” to the 5G standard protocols and technical specifications that allow connectivity between 5G devices.
“Smartphone makers have to pay for those “standard essential patents,” or SEPs, if they want to make 5G-compatible devices,” GreyB added.
Other patent owners
Meanwhile, other major 5G patent owners are said to be charging more than Huawei’s planned rate. Nokia said in 2018 that it will about $3.57 per device for its 5G SEPs, while Ericsson said in 2017 that its rate would be between $2.50 and $5 per device.