Huawei has a plan to compete in 5G without being able to sell its 5G phones everywhere. Today, the technology company has announced that it intends to seek royalties from companies like Apple and Samsung in exchange for using its patents, according to Bloomberg. Huawei believes it can close licensing deals, despite sanctions in the United States, and plans to use its earnings to invest even more in research and development.
Huawei obtained patents on the new technology during the development of the larger 5G standard – alongside companies like Qualcomm and Ericsson – which are necessary for interoperability between different 5G networks, according to CNBC. “Huawei has been the biggest technical contributor to 5G standards,” said Huawei’s head of intellectual property rights, Jason Ding, in a statement. The company plans to charge up to $ 2.50 per phone that uses its 5G patents. Huawei believes that its patent business should not be affected by ongoing sanctions, Bloomberg grades.
The gains from the company’s patents are already large. Ding estimates that Huawei will earn between $ 1.2 billion and $ 1.3 billion from patent licensing between 2019 and 2021. Huawei also plans to charge less than other manufacturers like Nokia and Ericsson for access to its essential patents of 5G standard (SEPs), according to CNBC.
Huawei is still banned from doing business in the United States by the Commerce Department due to espionage concerns. The company’s network technology also needs to be removed and replaced in the U.S. and the UK. The aggressive pursuit of patent royalties seems like a way to profit from the 5G business that Huawei was already building. And with no indication that the Biden government will renegotiate with the company or reverse the ban, it may need to.