Huawei Will Begin Charging 5G Royalties To Apple, Samsung And Others

Huawei announced it will begin charging fees for access to its patented 5G technologies – a move that will affect smartphone leaders like Apple and Samsung, Bloomberg and CNBC reported.

Frustrated by the continuing US sanctions, the Chinese tech giant has been trying to bolster and diversify its revenue streams. Huawei said it will be charging a “reasonable” royalty rate of up to US$2.50 (~RM10.29) for every phone that uses its 5G technology.

That US$2.50 cap might seem relatively modest compared to those of competitors. CNBC noted that Nokia caps its rate at €3 (~RM14.70) per device, while Ericsson charges from US$2.50 to US$5 (~RM20.59) per device.

For further comparison, chipmaker Qualcomm demanded US$7.50 (~RM30.88) from Apple for every iPhone, causing a feud between the tech giants, Bloomberg said. The companies finally made peace in 2019.

Huawei expects to pull in about US$1.2 billion (~RM4.9 billion) to US$1.3 billion (~RM5.4 billion) in revenue from patent licensing between 2019 and 2021. Obviously, those figures are likely to grow as the transition to 5G begins across the world.

Also, it’s plausible that Huawei is retaliating for a recent US move to further restrict component supplies for Huawei’s 5G devices. Washington, under Trump and now Biden, has often emphasised the need to protect American technology from Chinese firms.

Now, Huawei may be eager to publicly assert and leverage the dependence of others, especially in the West, on its technologies. In other words, it’s a game of tit for tat.