Huawei will bet on technology licenses to make money after suffering US sanctions. According to Bloomberg, the Chinese company will offer its 5G technologies to companies such as Apple and Samsung for a “reasonable fee” that promises to be lower than the royalties charged by competitors such as Qualcomm.
According to Song Liuping, head of Huawei’s legal industry, the company plans to charge a fee from Apple and Samsung in addition to licenses for future devices, including devices launched between 2019 and 2021. US $ 1.3 billion in fees.
Bloomberg spoke with Jason Ding, who heads Huawei’s intellectual property business, and the CEO revealed that the company plans to charge royalties of $ 2.50 for phones sold with the brand’s technologies. The amount is significantly lower than the fees charged by Qualcomm, which works with royalties of approximately US $ 7.50 per device.
Escape from sanctions
Huawei’s goal is to license its technology to companies that can operate in the United States. Currently, Huawei is not allowed to invest in 5G infrastructure in the country, but the company can ‘lend’ its patents to other companies.
In addition to technologies aimed at 5G, the company also has patents aimed at sectors such as the internet of things and self-driving cars. By offering values that are more attractive than the competition, the company can gain space in the connectivity market in the United States.
However, it’s important to note that Apple and Samsung may not be willing to pay the company $ 1.3 billion in fees for the company, which could lead to a major legal battle. In the past, Apple stood in court for the same reason for years, but eventually the chipmaker prevailed.