Huawei plans to charge Apple and Samsung 'reasonable' fees for 5G royalties

PHOTO: Huawei

Huawei plans to create a new revenue source by charging other phone makers a fee for accessing its 5G patents.

Bloomberg reports that Huawei owns the biggest portfolio of 5G patents and the Chinese company plans to charge Apple and Samsung a "reasonable" fee. It hopes to negotiate rates and secure cross-licensing deals with the two handset makers. Huawei executives reportedly said that patent and licensing fees will bring in about $1.2 billion (S$1.6 billion) to $1.3 billion between 2019 and 2021 although it's unclear which of those came from 5G royalties.

Jason Ding, head of Huawei's intellectual property department, said per-phone royalties will be capped at $2.50. This is significantly lower than the $7.50 royalty fee that Qualcomm charged Apple for every iPhone. This led to a two-year legal battle which ended in April 2019 when both companies signed a multi-year chipset supply deal and a six-year license agreement. Apple is believed to have paid at least $4.5 billion to settle the legal battle with Qualcomm.

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It's unclear at the moment whether Apple will be interested in a cross-licensing deal with Huawei. Apple acquired Intel's smartphone modem business in 2019 to expedite its developoment on future products. It also owned more than 17,000 wireless technology patents on protocols for cellular standards, modem architecture and modem operation.

The iPhone maker is said to have plans to use its own 5G modems in some products later this year. It is also rumoured to be working on its own 5G antenna design and starting the research and development on 6G technology.

This article was first published in Hardware Zone.