Huawei Unveils 5G Device Intellectual Property Royalty Rate

Huawei stepped up efforts to increase transparency around its patent cost structure and highlighted R&D progress. The Chinese company also revealed the royalty rate for its 5G handset technology for the first time.

Head of Huawei’s IP Department Jason Ding announced in a briefing it will provide a reasonable percentage royalty rate for each multi-mode 5G smartphone using its technology, capped at $2.50 per device. He said that the company was the largest technical contributor to 5G standards, and follows fair, reasonable and non-discriminatory (FRAND) principles when it comes to patent licensing.

“We hope the royalty rate we announced today will increase 5G adoption by giving 5G implementers a more transparent cost structure that will inform their investment decisions moving forward,“ added Ding. He estimates that by the close of this year, Huawei's revenue from patent licensing will stand at between $1.2 billion to 1.3 billion since the start of 2019.

“The price must provide a return on investment while making the cost of implementation by the industry reasonable. We take a balanced position between the two elements. We may be the top creator of patents, but that doesn’t mean we charge the highest rates,“ said Ding.

Based on data from the World Intellectual Property Organisation, Huawei said it was the largest filer of international patent applications in 2020, with 5,464 compared with the 3,093 from second-placed Samsung. At end-2020, Huawei employed 105,000 R&D staff, roughly 53.4 percent of its workforce. In 2019, R&D investments totalled CNY131.7 billion ($20.3 billion), 15.3 percent of annual revenue.