What you need to know
- Huawei is to begin charging Apple and others for use of its 5G patents.
- The "reasonable" fees proposed could generate billions in revenue for Huawei.
- Royalties will be capped at $2.50 per iPhone, which could still be an awful lot of money.
A new report says that Huawei will charge charging Apple and others for use of 5G patents that power the iPhone 12 and beyond.
Huawei Technologies Co. will begin charging mobile giants like Apple Inc. a "reasonable" fee for access to its trove of wireless 5G patents, potentially creating a lucrative revenue source by showcasing its global lead in next-generation networking.
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.
The report says Huawei will cap its fees at $2.50 per phone, which could still make for millions or even billions in revenue. Apple introduced 5G to the iPhone 12 last year, one of several upgrades which make it one of the best iPhones in recent memory. The global 5G network remains in its infancy, and a recent Deutsche Bank note claims that growth of 5G infrastructure will accelerate the iPhone upgrade cycle going forward.
The iPhone 13 is expected to feature Qualcomm's Snapdragon X60 modem, which will enable both mmWave and sub-6Hz 5g usage, even simultaneously. It would mean that mmWave might no longer be restricted to the U.S. and that the iPhone would be able to switch between bandwidths to either save battery life or maximize data speed.