Huawei’s position in the global market and moreso in the United States has been rocky to say the least. Now, however, the company has a way to maintain and grow its position.
If you don’t know much about Huawei and how things have been going for them, here’s a quick rundown: In 2019, Huawei was added to the United States Department of Commerce’s entity list, which essentially marks them as a company potentially in league with foreign governments that can therefore not be trusted. This led to doubts concerning whether Huawei could still run the Android operating system. Blow after blow has been dealt, with chip supplies to Huawei being cut off, and 5G equipment being banned and removed from telecomms networks in both the United States and abroad. Huawei ended the fourth quarter of 2020 with a 41.1% decline in sales over the previous year.
To mitigate these losses, Huawei has tried to break into other markets such as cars, wearables, laptops, and tablets, in addition to selling off their Honor sub-brand. Now, Huawei wants their royalties, namely from Apple and Samsung. Now, you might be confused, wondering what Apple and Samsung would owe Huawei as the former especially tries to keep all of their tech development in-house. As Huawei is a patent owner on many essential 5G technologies, they can reasonably charge companies access to those patents, which is necessary for developing 5G devices.
Huawei is in negotiations with Apple and Samsung concerning royalty rates, but the company plans to collect between $1.2 and $1.3 billion dollars in royalties from the companies. In order to keep their customers, Huawei will also charge lower rates for patent access than companies such as Qualcomm, Ericsson, and Nokia, with a cap of $2.5 per phone.