What you need to know
- A new report from Bloomberg says Huawei will soon charging royalties from Apple and Samsung for its wireless 5G patents.
- Huawei is capping per-phone royalties at $2.5, which is well below competitors like Qualcomm.
- The company plans to use the patent fees to maintain its position in the global 5G networking market.
Chinese smartphone and networking giant Huawei will soon begin charging a "reasonable fee" from rivals such as Apple and Samsung for using its wireless 5G patents, according to a new report from Bloomberg.
Huawei's Chief Legal Officer Song Liuping told reporters that the company will "negotiate rates and potential cross-licensing with Apple and Samsung." It aims to use the patent fees to expand its presence in the global 5G networking market. As per Jason Ding, head of Huawei's intellectual property department, the company is capping per-phone royalties at $2.5.
It is worth noting that Huawei owns more 5G patents than any other company. Even though Huawei plans to charge a much lower rate than Qualcomm and other rivals, it could still make billions in additional revenue over the next few years. Data from Allied Market Research suggests sales of 5G devices will hit $668 billion globally by 2026, up from $5.5 billion last year. While 5G was limited to the best Android phones in the mid-range and premium segments last year, it is now becoming increasingly common even on budget phones.
Thanks to the U.S. ban, however, Huawei is unlikely to be successful in maintaining its position in the wireless networking market. A large number of countries are still on the fence about allowing the use of Huawei equipment in their 5G networks.