With Huawei unable to access its U.S. supply chain, the Chinese manufacturer has been forced to innovate and it has come up with its own HarmonyOS operating system, now on its third version, and the Huawei Mobile Services platform. In other words, the company has been able to produce handsets like the Mate 50 Pro even without help from its U.S. supply chain.
Huawei still develops technology that other companies want
Huawei still has the ability to develop technology that other companies want. According to Nikkei Asia, on Friday the company announced a cross-licensing deal with Oppo which includes standard essential patents related to cellular connectivity including 5G. Standard essential patents (SEP) are those that a manufacturer needs to license in order for its devices to meet industry standards. Therefore, SEP are usually licensed using a Fair, Reasonable, and Non-Discriminatory (FRAND) royalty rate.
Adler Feng, Oppo's Chief Intellectual Property Officer, said, "We are very pleased to enter into patent cross-licensing agreement with Huawei. It clearly demonstrates that the two companies recognize and greatly respect the value of each other's intellectual property. It is a win-win deal for both sides. We will, as always, advocate for the establishment of a sustainable, healthy intellectual property ecosystem, where intellectual property licenses can be resolved through amicable negotiations and every company's patent value are highly respected."
The deal with Oppo includes patents related to 5G, Wi-Fi, and audio-video codecs. Huawei also announced that it has licensed important 5G technologies to Samsung. The latter, at one time, was the only company standing in the way of Huawei reaching its long-stated goal to become the largest smartphone manufacturer in the world. But then came the U.S. restrictions that not only prevented Huawei from using its U.S. supply chain but also banned it from obtaining cutting-edge chips.
Huawei appears to be on the comeback trail with heavy demand and long lines greeting the domestic release of the flagship Mate 50 series. But we digress. Let's return to the licensing deal that Huawei just made with Samsung.
From 2019 to 2021, Huawei reportedly took in as much as $1.3 billion from licensing fees
Unfortunately, no details about the deal were released by either party which means that the technology Huawei licensed to Samsung could be related to improvements for the 5G modems used on Samsung's mobile devices, or the licenses could be related to 5G networking gear to be used with Samsung Network's own telecom equipment.
Samsung has been criticized over its 5G mobile modem technology which was used on the Google Tensor chipset (Pixel 6 line) and the Tensor 2 chipset (Pixel 7 line). Pixel 6 series users had many issues trying to connect to 5G networks but so far this hasn't been much of an issue for Pixel 7 series users.
The report notes that over 20 companies have licensed Huawei's patents and other technology over the last few years. It is believed that the company was able to garner $1.2 billion to $1.3 billion in licensing fees from 2019 to 2021. Huawei needs this cash to make up for the huge drop in handset sales it has experienced since the U.S. bans started to bite.
And the company continues to be as innovative now as it was before getting hit by restrictions placed on it by the U.S. Last year it was the number one company in getting patents issued by the China National Intellectual Property Administration and the European Patent Office. Even in the states, where it is deemed a national security threat, last year Huawei was awarded a large number of patents that were topped by only four other companies.
Huawei's success in receiving patents and then licensing them to raise cash is touched on by a statement made by Alan Fan, Head of Huawei's Intellectual Property Department. Discussing the aforementioned deal with Oppo, the executive said, "After more than 20 years of continuous innovation, Huawei has developed multiple high-value patent portfolios in the global marketplace in domains like 5G, Wi-Fi, and audio/video codecs."
Fan continues, "We are delighted to have reached a cross-licensing agreement with Oppo. The mutual recognition of intellectual property value between companies is a major step towards fostering a positive cycle of innovation and research in high-value standards: investing, receiving returns from investment, and then reinvesting. This will enable our industry to keep innovating and provide consumers with more competitive products and services."