Huawei signs patent cross-licensing agreement with its biggest Chinese rival
Before Trump-era sanctions made the company a non-player in the market, Huawei was briefly the world number one largest phone maker, surpassing both Samsung and Apple in shipments. As a sign of how much it has fallen since then, Huawei announcement this week, it recently entered into a patent cross-licensing agreement with its biggest domestic rival. Oppo, the parent company of OnePlus and subsidiary of one of China’s largest electronics manufacturers, now owns the worldwide rights to Huawei coveted 5G patents.
The companies didn’t disclose the financial terms of the deal, but we have an idea of the money involved thanks to information Huawei has shared in the past. When the firm announcement it planned to monetize its patent portfolio more aggressively last year, saying it would charge phone makers a “reasonable” $2.50 per device to license its technologies. Huawei also said it expects to generate an additional $1.2 billion to $1.3 billion in revenue between 2019 and 2021 due to the move. If you consider Oppo and Vivo (both owned by the Chinese BBK Electronics) Shipped more than 51 million smartphones last quarter, that’s a lot of money at stake.
At the same time, Oppo gets access to some critical technologies. In 2021, about 18.3% of Huawei’s 5G patents fell under the Standard Essential Patent (SEP) category, meaning they were considered essential to the 5G standard. At the time, Huawei had the most widely used 5G-related SEPs of any company in the world.
It will be interesting to see if the deal garners interest from lawmakers in the United States and other parts of the world. For much of the past decade, BBK has managed to stay under the radar of regulators and mainstream media in the way that Huawei and ZTE not have. The company’s segmented brand portfolio makes its footprint look smaller than it is. In fact, it has always been one of the largest and most important phone manufacturers in the world.
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