Shulou(Shulou.com)11/24 Report--

Beijing, June 18 (Xinhua) according to Japanese media reports, Huawei is collecting royalties for the use of patented technology from about 30 Japanese small and medium-sized enterprises, indicating that the company is increasingly relying on such revenue.

Huawei is "currently in talks with about 30 Japanese telecom-related companies", according to a person familiar with the matter at Huawei's Japanese branch. Huawei is also believed to be stepping up efforts to collect such royalties in Southeast Asia.

In the technology world, it is highly unusual for large manufacturers to negotiate royalties directly with smaller customers. Generally speaking, negotiations on telecommunications technology patents are generally conducted between major equipment manufacturers. Such negotiations are time-consuming, and it is much more profitable to sell their own products. However, as Huawei is subject to U. S. sanctions, product sales are limited and profits fall, such royalty revenue becomes all the more important. Since royalties are not subject to trade restrictions, this could be a stable source of revenue for Huawei.

Huawei is currently collecting royalties from manufacturers and other companies that use wireless communication modules. People familiar with the matter from several Japanese companies said Huawei had been asked to pay for everything from small companies with only a few employees to start-ups with more than 100 employees. Huawei's proposed royalty payment model is to pay a fixed fee of 50 yen (2.5 yuan) or less per device, or charge 0.1% or less of the price of the equipment.

"this level of fees is in line with international standards," said Toshifumi Futamata, a visiting researcher at the University of Tokyo.

Huawei has a large share of standard essential patents, which are crucial for the use of wireless communications standards such as 4G or Wi-Fi. Devices made by other companies that are compatible with these standards also use Huawei's patented technology. This means that if Huawei asks, many companies that use the relevant Internet-connected devices will have to pay royalties. And even Japanese companies that do not use Huawei products can incur unexpected fees.

Huawei has set up an IP strategy center in Japan to oversee its IP operations in the Asia-Pacific region, including Singapore, South Korea, India and Australia. At the end of 2022, Japanese carmaker Suzuki reached an agreement with Huawei to obtain the necessary patents for standards related to 4G communication technology for connected vehicles.

In the future, more Japanese companies may face payment requirements from Huawei. Seed Planning, a Tokyo-based research company, says wireless communication modules using Huawei's patented technology, which is being used in areas such as autopilot, automated factories, medicine, power and logistics, are indispensable for the Internet of things.

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