The world's largest mobile phone chip maker and mobile communications patent company Qualcomm, and Apple into a legal dispute, Apple and Foxconn Group, and other foundries to suspend payment of royalties, the purpose is to require Qualcomm to change the current royalties standards.
According to the latest news from the media, Android camp is following the example of Apple. Huawei, China's largest smartphone maker, may have suspended payment of royalties. In addition, South Korea's Samsung Electronics is considering similar measures.
According to the Taiwan Times website quoted an insider said that Android manufacturers to suspend payment of royalties purposes, that is, the high-pass back to the negotiating table to re-negotiate a more reasonable level of royalties.
At a previous investor conference, executives at Qualcomm disclosed that a Chinese handset maker using its patented technology had suspended payment of royalties and Qualcomm did not give a specific name. But industry sources said the company is Huawei. Huawei is currently the third largest mobile phone manufacturer in the world and the number one mobile phone market in China.
Huawei's sales of handsets in the global market are still growing rapidly. Several market research companies predict that Huawei's handset sales will surpass Apple in 2017 or next year, becoming the world's No. 2 second only to Samsung Electronics.
According to sources, Huawei sold 150 million smartphones a year at an average selling price of 300 U.S. dollars. According to this calculation, Huawei one in Qualcomm annual royalties accounted for 5% to 10%.
As we all know, the smart phone is only Huawei's "sideline". Huawei is the top three communications equipment manufacturers in the world, building a communications network for mass mobile operators around the world.
According to sources, Huawei has a large number of mobile communications technology patents and base station technology, so there is enough capital to suspend payment of royalties to Qualcomm, and negotiate a more reasonable standard.
Similar to Huawei, Samsung Electronics is also a leading telecom equipment manufacturer in addition to developing mobile phones, and has a large number of patents on mobile communication technologies. The source said Samsung Electronics will also stop to pay royalties to Qualcomm.
Earlier, the South Korean government antitrust investigation of Qualcomm, and opened a huge 900 million US dollars in tickets, just in the recent South Korean court rejected the appeal of Qualcomm. South Korea's Fair Trade Commission has asked Qualcomm to re-negotiate royalties with Korean handset makers. The source said that if the South Korean mobile phone manufacturers to negotiate a new standard, Android phone manufacturers in other countries will also follow up, requiring Qualcomm to reduce its own royalties at the same time.
Qualcomm and Apple have been caught in a serious legal dispute before, Qualcomm is ready to prohibit the sale of Apple in China patent infringement of electronic technology products, Apple alleges that Qualcomm only involved in the technical patent of some parts, but according to the whole phone Price charged royalties, unreasonable. Apple also accused Qualcomm of owed its own billions of dollars in costs.
For Qualcomm, Apple paid patent fees accounted for about 30% of its patent revenue. Apple mobile phones to take high-end high-priced positioning, Qualcomm has also become a beneficiary. Earlier, Apple has notified Foxconn Group and other foundries, to pay royalties to Qualcomm.
In the context of the dispute with Apple, if Samsung, Huawei and other Android device manufacturers also join the ranks of the royalties will be Qualcomm team, Qualcomm will face even greater pressure on this year and next year's performance will be even greater impact .
It should be pointed out that in China's mobile phone market, China's National Development and Reform Commission also conducted an antitrust investigation against Qualcomm and set a record high of 1 billion U.S. dollars in history. Since then, Qualcomm re-revised the patent fees for China's Android mobile phone manufacturers, the cost significantly lower than in the past. Subsequently, including Xiaomi, OPPO, vivo, Cool and other Chinese manufacturers and Qualcomm has signed an official patent license agreement. Qualcomm's cooperation in China significantly improved the environment.
In patent licensing and royalties standards, handset manufacturers own proprietary library is also an important factor to be determined. For example, manufacturers can rely on their own patent cross-licensing directly to the other party to exempt from royalties.
In terms of mobile phones and communications technology patents, Huawei relies on years of research and development, far beyond the strength of other Chinese handset manufacturers such as Xiaomi. According to earlier information published by the European Patent Office, Huawei ranks second in the number of patent applications in 2016, second only to Philips, while Samsung, LG, Siemens and Qualcomm are both behind Huawei.