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| Huawei wants property rights in exchange for using its 5G technology |
Huawei has begun charging smartphone makers for using its patented 5G technology as the Chinese tech company seeks to provide a new source of revenue even as its other companies are hit by US sanctions.
"There are reasonable fees on the retail price of the phone," the company said. For smartphones that can connect to 5G networks and previous generations of cellular networks, the maximum ownership is $ 2.50.
The price is lower than some of Huawei's competitors, including the Finnish telecom company Nokia.
Royalty increases on major patents related to cellular technology could help Huawei offset at least some of its revenue from companies like smartphones due to US sanctions.
In addition, so-called global standards, that is, protocols, technical specifications and designs, must be established when developing a new generation of mobile radio technologies. These protocols, technical specifications and designs allow interoperability between global fifth generation networks and enable smart phones to interact with these networks.
Standardization bodies are required to create these global standards, and companies such as Huawei, Nokia, Ericsson, Qualcomm and many others have participated in the standardization process.
In this way, these companies create technologies that they can obtain, and the patents necessary to the 4G or 5G standards are considered standard core patents, or SEPs.
If this smartphone maker wants to bring a 5G phone to the market, it may have to use the standard base patents of one or more companies. In return, these companies can claim ownership fees.
Huawei has registered 3007 patents for 5G networks, the highest for any company in the world.
It is estimated that around 18.3% of Huawei 5G patents are standard base patents.
Huawei's ownership ceiling of $ 2.50 per device is the lowest among its competitors, Nokia's price per device is $ 3.58, and Ericsson's price per device is between $ 2.50 and $ 5.
Huawei charged the company for its 4G patents. The Chinese company estimates that granting these patents could generate sales of between $ 1.2 billion and $ 1.3 billion between 2019 and 2021.
Huawei has not been involved in intellectual property fees or litigation in the past, but that may change now as there are indications that the company is becoming more active in intellectual property lawsuits.
Last year, Huawei filed a lawsuit against Verizon, alleging that the US telecom company violated the patents owned by the Chinese telecom giant.