Huawei To Receive $2.5 For Each Smartphone Using Its 5G Tech

Huawei has for the first time ever revealed the royalty charges it will level for handset makers utilising its 5G technology.

Huawei’s chief legal officer Song Liuping revealed the royalty rates at a launch event for the company’s annual intellectual property white paper in China, Reuters reported.

The move to implement royal charges was an effort to increase transparency, insisted Liuping, although it is also clear the move will provide it with an additional revenue stream.

US ban

Huawei has been battling a US export blacklist since May 2019, when  an executive order was signed by then President Donald Trump, that declared a national security emergency against Chinese firms.

This order banned Huawei from buying parts and components from US companies without US government approval.

That decision made it difficult, if not impossible, for Huawei, to sell some products because of its reliance on US suppliers for essential silicon and other components.

But despite Huawei being banned from purchasing technology from US companies since May 2019, it managed to continue to build chips by reportedly commissioning their production in overseas foundries using US equipment.

To stop this in May 2020, the US amended its ban to include semiconductor designs and chipsets produced in non-US plants using US equipment.

This US ban placed a great deal of pressure on Huawei’s smartphone business, which in 2019 made up 54.4 percent of Huawei revenues.

Royalty rates

Since then Huawei is seeking to showcase its own research achievements, and Reuters quoted the firm’s head of IP, Jason Ding, as saying the Chinese networking giant is expecting to receive around $1.3 billion in revenue from patent licensing between 2019 and 2021.

And for every phone that uses Huawei’s 5G technology, the firm will receive up to $2.5 in royalties, Ding reportedly said.

Huawei has a number of 5G patents, although so do rivals such as Samsung, Nokia, Ericsson, and Qualcomm.

Reuters reported that by the end of 2020, Huawei held more than 100,000 active patents in over 40,000 patent families worldwide.