Over the past seven years, Chinese smartphone and telecoms equipment maker Huawei has transformed itself. Once a major customer of US chipmaker Qualcomm, Huawei is increasingly becoming a competitor, developing its own mobile chips and intellectual property.
The change, Juro Osawa writes for The Information on Tuesday, poses a threat to Qualcomm’s chip sales, and its valuable patent royalties. The shifting landscape could also erode Qualcomm’s bargaining power during licensing negotiations with other device makers, such as Apple.
“A decade ago,” Osawa writes, “Huawei’s relationship with Qualcomm was a friendly partnership.” But now, it looks increasingly like war.
“As China aspires to have a bigger impact on global technology standards, Huawei could become the primary example of the country’s growing clout,” Osawa notes.
“There will be a technology cold war between the US and China—and also between Qualcomm and Huawei,” he quotes counterpoint analyst Neil Shah as saying.
And the battlefield won’t be limited to chips for mobile phones. Huawei has spent about US$60 billion on R&D in the past decade and is looking to become the dominant player in a number of areas. Chips for the Internet-of-Things market and the 5G technology that will make things like driverless cars possible, will increasingly be the focus of competition.
Qualcomm has been the main holder of patents setting industry standards for 3G and 4G technology, but that is all set to change as Huawei accumulates patents related to 5G. Last year the behemoth was the world’s largest patent filer, according to the World Intellectual Property Organization.