Huawei Technologies Co. will begin charging mobile giants like Apple Inc. a “reasonable” fee for access to its trove of wireless 5G patents, potentially creating a lucrative revenue source by showcasing its global lead in next-generation networking.
According to statement by Chief Legal Officer Song Liuping, Huawei will be on the negotiating table with the iPhone maker and Samsung Electronics Co. for determining rates and discussing cross-licensing. Huawei is promising lower rates than its market contenders – Qualcomm Inc., Ericsson AB and Nokia Oyj.
Huawei may fix per phone royalties at $2.50 whereas they expect to bring in about $1.2 billion to $1.3 billion in patent and licensing fees between 2019 and 2021. On the other hand, Qualcomm charges $7.50 royalty from every iPhone.
Huawei will also negotiate rates for other 5G products such as water meters and smart cars, said Jason Ding, head of Huawei’s intellectual property department.
Huawei executives hope that American sanctions will not be a problem to cross-license with U.S. companies owing to the fact that these patents are publicly available.
Huawei will be investing income generated from patent fees back into research to maintain its position in the patent battle against its contenders (Ericsson and Nokia).
According to Allied Market Research, the sales of devices using 5G are expected to go through the roof – to $668 billion globally in 2026 from just $5.5 billion in 2020.
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