Huawei signed a patent cross-licensing agreement with its main Chinese competitor.

Oppo, the parent company of OnePlus, now has access to Huawei’s important 5G patents.

Huawei was briefly the world’s largest phone manufacturer, overtaking both Samsung and Apple in shipments before Trump-era penalties rendered the business irrelevant in the market. In a sign of how far it has sunk since then, Huawei announced this week it has gone into a patent cross-licensing agreement with its main domestic competitor. Oppo, OnePlus’ parent company and a subsidiary of one of China’s major electronics manufacturers, now owns the world’s rights to Huawei’s prized 5G patents.

The firms did not divulge the financial parameters of the agreement, but we have an estimate of how much money is involved according to information Huawei has previously released. When the company revealed plans to aggressively monetize its patent portfolio last year, it stated that it would charge phone makers a “fair” $2.50 per handset to license its innovations. Huawei also stated that the move would create an additional $1.2 billion to $1.3 billion in income between 2019 and 2021. When you consider that Oppo and Vivo (both owned by China’s BBK Electronics) shipped more than 51 million handsets in the previous quarter, there’s a lot of money at stake.

At the same time, Oppo is gaining access to important technologies. As of 2021, around 18.3 percent of Huawei’s 5G patents fell under the Standard Essential Patent (SEP) category, indicating that they were crucial to the 5G standard. At the time, Huawei has the most 5G-related SEPs in use of any company in the world.

It will be fascinating to watch if the deal piques the interest of lawmakers in the United States and elsewhere. For much of the last decade, BBK has been unnoticed by regulators and the mainstream media in ways that Huawei and ZTE have not. Because of the company’s divided brand portfolio, its footprint appears smaller than it is. In truth, it has continually been one of the world’s largest and most essential phone manufacturers.

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