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Huawei to start charging royalties on smartphones for its 5G tech
CGTN
The Huawei Technologies logo is displayed on a smartphone with the 5G inscription background. /CFP

The Huawei Technologies logo is displayed on a smartphone with the 5G inscription background. /CFP

Huawei announced on Tuesday that it will begin to charge smartphone makers a royalty for access to its patented 5G technology, potentially creating a new revenue source showcasing its research achievements.

The technology giant is expecting to receive about $1.2 billion to $1.3 billion in revenue from patent licensing between 2019 and 2021, according to Jason Ding, head of Huawei's intellectual property department.

The company said that it will charge "a reasonable percentage royalty rate" of the handset selling price. It's capping per-phone royalties at $2.50 for smartphones that comply with 5G standards.

This price is lower than some of Huawei's competitors. Chipmaker Qualcomm thrives on charging royalties on the technology they supply. Along with other rivals like Samsung Electronics, Nokia, and Ericsson, Huawei is one of the leaders in 5G patents, although studies about which company is ahead in the race vary.

Huawei was put on an export blacklist by former U.S. President Donald Trump in 2019, citing national security concerns and barred from accessing critical technology of U.S. origin. Huawei has repeatedly denied the accusation.

"Huawei currently holds more than 10,000 authorized patents in the United States. These patents will bring value to the U.S. industry, but we will not call this a curvy entry [into the U.S. market], this is a natural logic," said Song Liuping, the company's chief legal officer on Tuesday.

By the end of 2020, Huawei held more than 100,000 active patents in over 40,000 patent families worldwide, the company said. Its R&D investments totaled 131.7 billion yuan ($20.27 billion) in 2019.

(With input from Reuters)

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