Apple and Samsung are going to have to begin paying Huawei 5G royalties according to a new report.
While Huawei calls the fee “reasonable,” it’s still likely to prove to be a very lucrative revenue stream for a company that will have both Apple and Samsung paying up presumably for every 5G-enabled device that they sell, according to a Bloomberg report.
The owner of the world’s largest portfolio of 5G patents will negotiate rates and potential cross-licensing with the iPhone maker and Samsung Electronics Co., Chief Legal Officer Song Liuping said. It aims to get paid despite U.S. efforts to block its network gear and shut it out of the supply chain, but promised to charge lower rates than rivals like Qualcomm Inc., Ericsson AB and Nokia Oyj. Huawei should rake in about $1.2 billion to $1.3 billion in patent and licensing fees between 2019 and 2021, executives said without specifying which of those stemmed from 5G. It’s capping per-phone royalties at $2.50, according to Jason Ding, head of Huawei’s intellectual property department.
Huawei is on the hunt for new ways to make money at a time where it’s still unable to do business in the United States.
The royalty road is one that Qualcomm is already driving down and it makes around $7.50 for every iPhone that’s sold. Huawei says that its current situation with the United States government won’t be enough to stop it from collecting money from Apple.
Apple currently owns Intel’s former modem business and is working to ditch Qualcomm parts for future iPhones and iPad. It will still need to pay Huawei for its royalties, however.
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