Huawei signs a patent cross-licensing agreement with its biggest Chinese rival
Before Trump-era sanctions made the company a non-player in the market, Huawei was briefly the world’s largest phone manufacturer, surpassing both Samsung and Apple in shipments. In a sign of how much it has fallen since then, Huawei announced this week it recently entered into a patent cross-licensing agreement with its biggest domestic rival. Oppo, the parent company of OnePlus and subsidiary of one of China’s largest electronics manufacturers, now has global rights to Huawei’s coveted 5G patents.
The companies did not disclose the financial terms of the deal, but we have some idea of the money involved thanks to information Huawei has shared in the past. When the firm announced it was planning to monetize its patent portfolio more aggressively last year, it said it would charge phone makers a “reasonable” $2.50 per device to license its technologies. Huawei also said it expected to generate an additional $1.2 billion to $1.3 billion in revenue between 2019 and 2021 due to the move. When you consider Oppo and Vivo (both owned by China’s BBK Electronics) shipped more than 51 million smartphones last quarter, that’s a lot of money on the line.
At the same time, Oppo is obtaining access to some critical technologies. As of 2021, approximately 18.3 percent of Huawei’s 5G patents fell under the Standard Essential Patent (SEP) category, meaning they were considered critical to the 5G standard. At the time, Huawei had the most in-use 5G-related SEPs of any company in the world.
It will be interesting to see if the agreement draws interest from lawmakers in the US and other parts of the world. For much of the past decade, BBK has managed to stay under the radar of regulators and mainstream media in the way that Huawei and ZTE have not. The company’s segmented brand portfolio makes its footprint seem smaller than it is. In reality, it’s consistently been one of the largest and most important phone makers in the world.
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