Common Enemy: Tech rivals, Huawei, Xiaomi team up to take on Samsung, Apple’s duopoly

Huawei Technologies and Xiaomi Corp, two of China’s biggest smartphone players, have decided to put their intellectual property dispute on the back burner and instead inked a global patent cross-licensing deal. This agreement covers various communication technologies, including the ever-important 5G, and it’s poised to boost the expansion efforts of both companies.

Alan Fan, who heads up Huawei’s intellectual property department, summed it up well in a joint statement released on Wednesday, saying, “This licensing agreement once again shows how the industry recognizes Huawei’s contributions to communication standards and will help us invest more in researching future mobile tech.”

Before this deal, Huawei, based in Shenzhen and holding the world’s most 5G patents as of April 2022, was tangled up in a patent infringement lawsuit with Xiaomi. The lawsuit spanned everything from the 4G standard to smartphone photography and a screen-lock method. Xiaomi, headquartered in Beijing, tried to challenge one of these patents in April, but China’s National Intellectual Property Administration shot down that attempt in early September.

Xu Ran, the general manager of corporate business development and IP strategy at Xiaomi, summed up the new agreement as a sign of mutual recognition and respect for each other’s intellectual property.

This agreement highlights Huawei and Xiaomi’s determination to challenge Apple in the high-end smartphone market segment, where Apple’s iPhone has long held sway both in China and globally.

Huawei’s new Mate 60 Pro and Mate 60 Pro+ 5G phones have garnered patriotic fervour among Chinese consumers, thanks to their “breakthrough” made-in-China processor, the Kirin 9000s. This has also turned Huawei’s latest 5G smartphone range into a symbol of China’s defiance in the face of harsh US tech sanctions.

Xiaomi, on the other hand, has made it clear that they’re gunning for Apple. Lei Jun, the company’s founder, chairman, and CEO, reiterated this goal and pledged to compete more aggressively against other Chinese smartphone rivals at home. He emphasized the need to aim for the high-end market to drive technological innovation and secure their future in the industry.

Xiaomi is putting its money where its mouth is with plans to invest heavily in various areas, including hardware, software, tech infrastructure, and artificial intelligence. They’ve committed a substantial 100 billion yuan or $13.7 billion to research and innovation projects over the next five years.

There’s also speculation that Xiaomi is venturing into developing its own smartphone system-on-a-chip (SoC) based on their recent job postings. Meanwhile, Huawei, despite being on the US blacklist, has poured over 977.3 billion yuan into tech research and development over the past decade, with more than half of its workforce engaged in research roles. As of 2022, they held more than 120,000 valid licensed patents, making them China’s largest patent holder. This patent portfolio generated $560 million in royalty revenue last year.

This deal with Xiaomi comes on the heels of Huawei’s recent global patent cross-licensing agreement with Sweden’s Ericsson, covering 3G, 4G, and 5G mobile technologies. Huawei has also forged similar patent-licensing agreements with Oppo, Samsung Electronics, and Nokia.

In the end, these deals are not just about the companies involved but also about pushing innovation in the industry, ultimately benefiting consumers. Chinese consumers, in particular, are increasingly favouring cutting-edge smartphone models, and this trend motivates vendors to invest in more product innovations to stay ahead in the tech race, as highlighted by Amber Liu, an analyst at market research firm Canalys.