Huawei Strikes Biggest 4G Patent Licensing Deal With Volkswagen Supplier

Chinese telecommunications giant Huawei Technologies Co recently revealed that it has signed a 4G patent licensing deal with an unnamed supplier of parts to Volkswagen, the world’s largest carmaker. Although reports said it was Luxembourg-based Rolling Wireless, one of the world’s leading suppliers of 4G and 5G network access devices to the car industry, as Huawei moves to diversify its business to help overcome crippling trade sanctions imposed by the United States.

The deal is Huawei’s biggest patent licensing agreement in the car industry, as its 4G mobile technology is expected to be deployed in more than 30 million Volkswagen vehicles with wireless connectivity, according to an announcement from the Shenzhen-based company on Wednesday. It did not provide the identity of the Volkswagen supplier.

Huawei Chief Legal Officer Song Liuping said: “As an innovative company, we own a leading patent portfolio for wireless technologies, which creates great value for the automotive industry. We are pleased that key players from the automotive industry recognize that value. We believe this license will benefit worldwide consumers with our advanced technology.”

Following a clampdown on Huawei from the US, the company has said it would need to diversify in order to reverse a revenue decline. In April, the company reported first-quarter sales were down 16.5%, but the result was expected due to Huawei selling off its Honor brand last year.

While revenue was down, margins were up thanks to a $600 million patent royalty, and “ongoing efforts to improve quality of operations and management efficiency”, the company said at the time. “2021 will be another challenging year for us, but it’s also the year that our future development strategy will begin to take shape. No matter what challenges come our way, we will continue to maintain our business resilience. Not just to survive, but do so sustainably,” Huawei rotating chair Eric Xu said.