One of the big bets placed by the new, post-sanctioned Huawei is its continued heavy spending on R&D despite its shrinking business.

Last year it maintained research spending at 142.7 billion yuan (US$21.4 billion), just a fraction above the previous year in absolute terms, but representing 22% of total sales, compared to 16% in 2020.

Depending on who you ask, that places it in second or third place in global corporate R&D spend.

Figure 1: In the past five years, more than 2 billion smartphones have been licensed with Huawei IP.
(Source: Karlis Dambrans on Flickr, CC 2.0)

In any case, in its enforced pivot from handsets to enterprise and auto, the company is not turning off the R&D tap – a point Huawei execs stressed as they made one of their rare forays before a non-Chinese audience this week.

The topic was IP and innovation, though it's not really clear why. Huawei has previously ruled out developing an IP licensing business and, apart from awarding some internal prizes for staff inventions, there was no news to impart.

On that front, all Huawei could say was it is still in discussion on joint licensing of 5G patents and on developing new Wi-Fi and video patent pools.

But Alan Fan, head of the IP department, came armed with stats: in the past five years, more than 2 billion smartphones have been licensed with Huawei IP – that's around 27% of the total. Huawei tech is also in "8 million connected cars every year."

Largest single EU patent applicant

The company last year filed nearly 12,000 patent applications in China and 7,000 in the EU, making it the largest single EU applicant for the fifth year in a row. It also has the most granted patents in China.

In truth, these raw patent numbers, while greatly loved by Chinese companies and government officials, aren't terribly illuminating. That's not just a personal opinion – another speaker, Professor Manuel de Santis, a former deputy head of the EU Patent Office, made that very point.

"It is a mistake to keep focusing the success of our IP system on the number of patent applications or the number of patents," he said. "The point is not to have many patents. The point is to focus on the many patents that are in the market benefiting people. So the focus [should be] on the quality of our patents."

Perhaps the reason for all this IP talk is that mobile patent licensing is a particularly febrile segment right now.

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"The licensing of 5G SEPs [standard-essential patents] looks set to become a major issue, not only for the handset industry, but for any manufacturing sector that involves connectivity," market intelligence firm IPlytics cautions in a new report.

"Licensing of 5G SEPs promises to become a highly lucrative market, making the 5G patent race more competitive than ever before," it said.

Ford's loss in a recent SEP lawsuit, meaning it can no longer sell LTE-enabled cars in Germany, "is the tip of the iceberg in the current automotive battlefield of SEP litigation," it adds.

"One thing is certain: the majority of SEP holders will actively monetize and enforce their SEP portfolios covering 5G standards in this fast-moving, high-investment environment."

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— Robert Clark, contributing editor, special to Light Reading