Huawei is turning to its portfolio of 5G patents in an effort to offset the losses its traditional 5G business has suffered.
The Chinese firm has been under pressure around the world, as governments have banned the company from participating in their nation’s 5G networks. At the heart of the issue is Huawei’s perceived ties to the Chinese government, which many nations see as a threat to their national security.
Huawei is now turning to other sources of revenue. The company is rumored to be looking into electric vehicle production, and recently sold its Honor smartphone line.
The company is now looking to profit from its portfolio of 5G patents by licensing them to other companies. Along with Ericsson and Nokia, Huawei helped develop the 5G standard. As a result, the company has a broad portfolio of patents, especially in technologies that help interoperability between networks.
Jason Ding, Head of Huawei’s Intellectual Property Rights Department, said, “Innovation has been at the core of Huawei’s business since the company was founded. Our 2020 white paper lists the number of patent applications Huawei filed, or our R&D and innovation activities, in the late 90s and early 2000s.” He also stated, “Huawei’s worldwide patent applications were on par with other industry leaders in the early 2000s, and Huawei’s success today is a result of its long-term investment in innovation and R&D.”
According to Ding, Huawei estimates its patent business will generate between $1.2 and $1.3 billion between 2019 and 2021. The company is striving to charge a reasonable royalty rate per handset, capped at $2.50 per unit.
“Huawei has been the largest technical contributor to 5G standards, and follows fair, reasonable and non-discriminatory (FRAND) principles when it comes to patent licensing,” added Ding, “we hope that the royalty rate we announced today will increase 5G adoption by giving 5G implementers a more transparent cost structure that will inform their investment decisions moving forward.”