Huawei secures large patent deal with VW supplier

Mobile communications patents will be more valuable in the era of autonomous driving than they are today. China’s telecommunications giant Huawei is now announcing a major deal with a VW supplier. Both sides are taciturn about details about the deal.

The Chinese telecommunications giant Huawei will earn money from networking Volkswagen cars in the future. Some of the vehicles contain technology, the basics of which come from the Shenzhen-based company. Huawei – known primarily for its smartphones and cellular network infrastructure – announced on Wednesday that it had signed a license agreement with a supplier from Wolfsburg.

Neither side wanted to say which company it was. VW stated that confidentiality had initially been agreed on. It is about supplies for the core Volkswagen Passenger Cars division.

Their base platforms are also used in several other group brands of the world’s second largest car group. In general, it said about the Huawei deal: “We welcome the fact that a leading company in information and communication technology (ICT) has granted our supplier a license to standard-essential mobile communications patents.” Mobility industry and ICT industry can succeed ”.

According to Huawei, the patents revolve around the technical basis of LTE radio data transmission. It is the largest own license agreement with the automotive industry to date – it is expected that more than 30 million vehicles will be licensed with existing agreements.

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Since car manufacturers have increasingly equipped their cars with cell phone modules, patent licenses for the relevant technologies have become a hot topic. Network suppliers such as Nokia and Huawei hold many patents for basic technical solutions – and want to see money for them.

One point of contention is, among other things, whether licenses concluded through auto suppliers are sufficient. It is also common for patent holders to receive a share of the retail price of the end product. However, there are disputes, for example, about whether the benchmark is the price of the entire car or just the price of the telecommunications component in question. It was only at the beginning of June that Daimler and Nokia settled a patent dispute that had lasted for years with their own deal.

Great success for Huawei

For Huawei, the agreement with the anonymous Volkswagen supplier is a particularly important success: the Chinese group was through US sanctions recently came under heavy pressure. The former global number two has lost a lot of ground in western smartphone markets because of the devices without Google services have to get by.

In addition, it is becoming apparent that in some countries Huawei cannot have high hopes for a substantial participation in the expansion of the super-fast 5G cellular networks. Critics fear, for example, that China’s political leadership could use its influence on the company to increase the dependence of European high-tech infrastructures on the powerful provider. For its part, Huawei emphasized several times that it is not a state-owned company.

Access to patented cellular technology is important for VW and other car manufacturers. At the same time, however, the corporations are also investing in more software and control technology that they produce themselves. Data networking, which enables ever higher exchange rates and more complex applications, is essential if the expansion of the business model from pure car manufacturing to offering personalized services and autonomous driving is to succeed. dpa

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