The US sanctions on Huawei have not left the company the same.
The Chinese technology firm has since been looking in different places to make up for the revenue it's lost. Last month, it was reported that Huawei was looking into using its facial recognition tech to help pig farmers identify individual pigs. This week, the company intends to charge smartphone makers a royalty to use its patented 5G Technology.
How much? A “per unit royalty cap” at $2.50 for smartphones capable of connections to 5G and previous generations of mobile networks.
Why this is possible
When a new generation of cellular technology is being developed like 5G, there’s a need for global standards to be created. To create these standards technology companies such as Huawei, Nokia, Ericsson, Qualcomm and many others contribute to the standards development process. In doing this, these companies also create technologies that they then patent.
The patents which are critical to the standards of say 4G or 5G, will be considered as a “standard-essential patent” or SEP. This means if a smartphone maker wants to release a 5G handset, they’ll most likely need to use the SEPs of one or more of these companies. In return, these companies can ask for a royalty fee.
Huawei has 3,007 declared 5G patent families, the highest out of any company in the world. It’s estimated that 18.3% of these are SEP.
Are other companies asking for Royalties?
Yes, they intend to. In 2018, Nokia said the licensing rate for its 5G SEP portfolio will be capped at 3 euro ($3.58) per device. Ericsson said it will charge $2.50 to $5 per device.
Read more: Huawei to start charging royalties to smartphone makers using its patented 5G tech