Patent war among mobile phone giants: Samsung and Huawei are in close combat, Apple is fighting Qualcomm

　　The fierce competition in the mobile phone industry has entered a new stage. Let's learn about the relevant content with the mobile phone portable editor.

　　Qualcomm vs. Apple, Samsung vs. Huawei , the leading international players are launching a new round of intractable and complex "world war" on a global scale - the patent dispute.

　　Public data shows that among the world's high-tech companies in 2016, only six companies invested more than US$10 billion in R&D, namely Samsung , Intel, Google, Microsoft, Huawei and Apple.

　　In fact, behind the giants' heavy investment in R&D, they also hope that the technological achievements formed by technological R&D can be converted into corresponding market returns. Ren Zhengfei, the head of Huawei , predicted the occurrence of a "patent world war" a few years ago, warning companies that they must have a clear strategic judgment and strategic design for this.

　　What are the purposes and strategies of the giants suppressing each other? What thoughts can we draw from the patent war? And how will Xiaomi and OV, the domestic companies that are ambitiously preparing to go abroad, prepare for the battle?

　　Samsung and Huawei are in close combat

　　Samsung has been feeling a bit cold in the Chinese market since this summer. Both it and Huawei have launched fierce patent invalidation applications to the Patent Reexamination Board of the State Intellectual Property Office in China, and the current situation is slightly unfavorable to Samsung.

　　On November 1, Samsung just received the latest review decision letter from the Patent Reexamination Board of the State Intellectual Property Office, which "declared all patent rights invalid". The relevant patents involved "wireless communication technology."

　　On October 31, the Patent Reexamination Board issued nine decisions at once. Among them, two of Huawei's five applications for invalidation of Samsung's patents were ruled invalid in full and one was ruled partially invalid; and among Samsung's four applications for invalidation of Huawei's patents, one was ruled invalid in full and two were partially invalid.

　　According to the Times Weekly reporter's review of the National Patent Reexamination Board's review decisions, as of now, in the series of patent infringement cases filed by Samsung against Huawei in the Chinese market in 2016, 21 patents have announced the results of invalidation review, and a total of 13 have been ruled invalid, with a rate of 62% of the patents involved being invalidated after invalidation review. In the series of patent infringement cases filed by Huawei against Samsung, 13 patents have announced the results of invalidation review, and a total of 4 have been ruled invalid, with a rate of 31% of the patents involved being invalidated after invalidation review.

　　The fight between Samsung and Huawei dates back to May last year. At that time, Huawei took the lead in suing Samsung for patent infringement and announced that it had formally filed an intellectual property lawsuit against Samsung in the Northern District Court of California and the Shenzhen Intermediate People's Court. In recent years, Huawei terminals have repeatedly revealed their ambition to surpass Samsung in the global market, and patent attacks are seen as an important step.

　　Subsequently, Samsung hit back strongly and sued Huawei for alleged infringement of 10 patents.

　　As for more details of the patent dispute, Huawei's public relations personnel declined to be interviewed by the Times Weekly reporter, saying that "there is no further progress to disclose." Samsung also did not disclose more details to the Times Weekly reporter.

　　Li Junhui, a special researcher at the Intellectual Property Research Center of China University of Political Science and Law, believes that Huawei has the upper hand in general because the number of patents maintained by Huawei is greater than that of Samsung. Huawei is gradually gaining more chances of winning in its confrontation with Samsung, whether in the litigation battlefield or in the sales market.

　　An industry insider familiar with Huawei told the Times Weekly reporter that Huawei has a slight advantage because many of its patents are basic patents that are difficult to bypass or invalidate. Huawei holds a large number of 3G and 4G basic patents, especially 4G core patents. Apple has also begun cross-licensing with Huawei. Huawei will probably eventually exchange with Samsung in their respective fields such as chips and communications, otherwise it will inevitably be entangled in a long-term lawsuit.

　　Fu Liang, a senior analyst in the communications industry, told the Times Weekly reporter: "In terms of the patent system, all manufacturers are making efforts to lay out and actively defend, but each has a different focus. Qualcomm has an advantage in chips, Huawei and Ericsson are mainly in communication networks, and Samsung and Apple have advantages in design and software applications. The end result is that they cannot circumvent each other in many areas, forming a big network of 'you are in me, I am in you'."

　　It is worth noting that in addition to patents, the supply of key components is also a battlefield that cannot be ignored in the fight between Samsung and Huawei. An industry insider commented to the Times Weekly reporter that Huawei's strong attack on patents is also conducive to balancing the "Samsung clamp" that monopolizes 90% of AMOLED screens.

　　Li Junhui commented to the Times Weekly reporter: "The litigation dispute between Huawei and Samsung will increase Huawei's bargaining chips, or in other words, prompt the two sides to reach a more comprehensive cooperation. Of course, breaking through the limitations of memory and screens still requires the rise of domestic related accessory companies and the improvement of quality."

　　Interestingly, on October 26, just one day before the pre-sale of iPhone X, BOE's Chengdu flexible AMOLED 6th generation line, with a total investment of 46.5 billion yuan, announced mass production and delivered on-site to more than ten customers including Huawei, OPPO, VIVO, Xiaomi, ZTE, and Nubia. It is reported that Apple wants to get rid of Samsung's monopoly and has also contacted BOE in the OLED field. This is China's first fully flexible AMOLED production line and the world's second mass-produced 6th generation flexible AMOLED line, breaking Samsung's absolute monopoly in this market. It is understood that BOE's Mianyang flexible AMOLED 6th generation line will be put into production in 2019, and the total production capacity of the two production lines will reach 96,000 pieces per month. Many institutions predict that by 2020, BOE will surpass LGD to become the world's second largest AMOLED panel supplier.

　　In an interview with a reporter from the Times Weekly, Zhang Yu, senior vice president of BOE, said that AMOLED screens will be in short supply in the next two to three years, and BOE will accelerate the expansion of this piece of cake.

　　Apple vs. Qualcomm

　　In addition to the fierce battle between Huawei and Samsung, the patent war between Qualcomm and Apple also reached its climax when Qualcomm applied to the Beijing Intellectual Property Court at the end of September to ban the sale of iPhones in China.

　　The financial report shows that in the fiscal year 2016 ending at the end of September 2016, Apple's revenue contribution from Greater China was 22.49%. By the end of April this year, this proportion was 20.54%, and by July this year, this proportion continued to decline to 17.63%. Apple's market share in China has declined.

　　Seeking to ban the sale and manufacture of iPhones in China is the most drastic action Qualcomm has taken against Apple so far. Apple accused Qualcomm of an unreasonable intellectual property licensing model, while Qualcomm accused Apple of using Qualcomm's patents without paying. Industry insiders pointed out that at a time when Apple was facing sales difficulties in the Chinese market, Qualcomm applied for a sales ban on Apple in China in order to give Apple the most fatal threat at the best time, to seek peace through war, and to make Apple give up the idea of ​​reducing the "Qualcomm tax".

　　Prior to this, Qualcomm and Apple had launched several lawsuits in the United States, China and other places. Regarding the dispute and progress of the lawsuit with Apple, Qualcomm China's public relations personnel refused to comment to the reporter of Time Weekly.

　　Qualcomm's financial report shows that in the 2016 fiscal year ending at the end of September 2016, Qualcomm's total revenue was US$23.554 billion, and technology licensing fees reached US$7.66 billion, accounting for 32.5% of revenue. The financial report for the first three quarters ending at the end of June this year shows that technology licensing fees reached 5.232 billion yuan, accounting for 31.92% of revenue.

　　In the revenue structure of Qualcomm in fiscal year 2016, the revenue contribution from mainland China (including Hong Kong), South Korea and Taiwan ranked the top three, accounting for 57.33%, 16.63% and 12.08% respectively. Qualcomm's R&D expenses in fiscal year 2016 were US$5.5 billion, accounting for about 23% of total revenue.

　　Relying on its patent accumulation in the 3G/4G field, Qualcomm is able to charge mobile phone manufacturers patent licensing fees. Currently, Qualcomm has more than 13,000 patents, among which CDMA technology has an absolute monopoly. Anyone who wants to produce a mobile phone with CDMA network standard must pay patent fees to Qualcomm.

　　In Fu Liang's opinion, Qualcomm, Nokia, Ericsson and other companies currently have a firm grip on the right to speak because they own a large number of patent technologies. Even if they are gradually marginalized in the terminal market, litigation is still a good business for them.

　　In fact, due to patent issues, many domestic manufacturers have suffered "a heavy blow" during their overseas expansion. In 2014, Xiaomi was sued by Ericsson in India and was banned from selling. Gionee mobile phones also had a patent crisis in the Indian market. At that time, Ericsson notified the Indian customs and detained Gionee's equipment. In the early years, Huawei was also sued by Cisco, Motorola and other companies. Patents have undoubtedly become a powerful weapon in the business world.

　　Lessons from the Battle of Giants

　　Huawei's annual flagship phone, Mate 10, was released at a time when it was almost competing head-on with iPhone X and Note 8, but Richard Yu, head of Huawei's consumer business, still seemed quite proud.

　　The latest data shows that Huawei shipped 112 million mobile phones in the first three quarters of this year, a year-on-year increase of 19%, and revenue increased by more than 30% year-on-year, becoming the No. 1 in China's market share and surpassing Apple to become the second largest manufacturer in the world. Well-known research organization IDC believes that since the second quarter of this year, Huawei's smartphone sales have soared year-on-year, thanks to the continued hot sales of mid-to-high-end models such as Huawei P10, Mate 9, and Honor series. This also means that Huawei is continuing to devour the high-end market dominated by Samsung and Apple.

　　Behind these brilliant achievements is actually Huawei's long-term investment in R&D and technological reserves, which are Huawei's biggest bargaining chip and foundation.

　　In 2013, Ren Zhengfei predicted: "In the next 5-8 years, a 'patent world war' will break out, and Huawei must have a clear strategic judgment and strategic design for this."

　　The latest data released by the European Patent Office shows that in 2016, China's European patent applications reached 7,150, a year-on-year increase of 24.8%, the highest increase in the world. Among them, in terms of patent applications, Huawei ranked second with 2,390 patents, second only to the Dutch Philips Group, and ahead of Samsung and Qualcomm in the field of digital communications.

　　According to the annual report, Huawei's R&D investment in 2016 reached 76.4 billion yuan, accounting for 14.6% of its sales revenue. In the past decade, its cumulative R&D investment has reached 313 billion yuan, and it has obtained a total of 62,519 patent authorizations, of which more than 90% are invention patents.

　　Recently, in an interview after the Mate 10 launch conference, Yu Chengdong, chairman of Huawei Device Company, told the Times Weekly reporter: "Huawei's R&D investment in mobile phones exceeds the total R&D expenses of hundreds of domestic companies." Speaking of global rivals Samsung and Apple, Yu Chengdong said frankly, "Huawei will be even stronger in the future. We will not do things that are slightly better than others, but develop technologies that are truly ahead of others."

　　According to the latest license registration information released by the State Intellectual Property Office, Huawei licensed 769 patents to Apple in 2015, and Apple licensed 98 patents to Huawei. This means that Huawei has begun to charge Apple for patent licensing fees. According to industry rumors, Huawei's licensing fee is between 60 million and 80 million US dollars.

　　Regarding the enlightenment brought by the patent war among giants, on October 30, OPPO Vice President Wu Qiang also talked about OPPO's understanding of patent competition in an exclusive interview with a reporter from the Times Weekly.

　　"Patent competition cannot have shortcomings. Patent competition is a reflection of the comprehensive strength of an enterprise, but the goal of patent competition should not be to compete for the market. Many manufacturers use patents only as a means to establish market barriers, compete for the market, and restrict their competitors. OPPO believes that the essence of patent competition is to better satisfy users. Patent layouts that cannot adapt to changes in user needs are lifeless."

　　Li Junhui told the Times Weekly reporter: "The revelation of the patent war between giants to domestic mobile phone manufacturers is that in addition to seeking sales and returns from the market, they can also obtain reasonable market returns through technology accumulation and patent layout."

　　In Li Junhui's view, the mobile phone market is approaching saturation in China and seeking growth abroad. Of course, we should pay attention to the arrival of 5G, which is a major turning point and will bring a new wave of phone replacement.

　　Fu Liang told the Times Weekly reporter that the development trend of smartphones is bigger screens and faster speeds, and imagination has basically been limited. In the 5G era, due to technological changes and the emergence of more scenarios, more mobile terminal devices will emerge and flourish. "For mobile phone manufacturers, they used to compete on a narrow track. In the future, the 5G competition track will not only become wider, but also have more small branches, and the competition will be more complex and fierce. Huawei, ZTE and other manufacturers should rely on their own advantages in the network to seize the 5G opportunity and focus on the application and layout of more smart terminals."

    The above is an introduction to the patent war between mobile phone giants in the portable mobile phone market: Samsung and Huawei are fighting closely, and Apple is fighting Qualcomm. If you want to know more relevant information, please pay more attention to eeworld. eeworld Electronic Engineering will provide you with more complete, detailed and updated information.