Who’s Leading the $15B 5G Patent Race? Huawei, Qualcomm, and the Future of SEP Licensing
The global 5G patent licensing market is now worth approximately $15 billion annually, according to a new report by LexisNexis. The study highlights how standards-essential patents (SEPs) are increasingly shaping negotiations, licensing models, and competitive dynamics across industries like automotive, industrial IoT, and healthcare.
The stakes have never been higher, as 5G expands beyond smartphones into mission-critical applications. Licensing disputes and Fair, Reasonable, and Non-Discriminatory (FRAND) rate-setting now often hinge on portfolio analytics, essentiality, and technical contributions to 5G standardization via the 3GPP framework.
Huawei, Qualcomm Lead the Pack—but with Contrasting Strategies
LexisNexis named Huawei and Qualcomm as top players in the 5G SEP landscape, citing their leadership in granted and active patent families, value-adjusted portfolio strength, and sustained participation in the 3GPP standards-development process. However, the two companies contrast sharply in monetization intensity.
Qualcomm’s licensing division, QTL, generated $5.6 billion in fiscal 2024 revenue—14% of its total sales and nearly 30% of its pre-tax profit. Huawei, by comparison, earned $630 million in licensing revenue during the same period, which accounts for just 0.5% of its overall turnover. Despite its lower monetization rate, Huawei continues to invest heavily in R&D, making it both a major licensor and implementer.
For context, companies like Ericsson and Nokia sit between Qualcomm and Huawei. In 2024, Ericsson earned $1.57 billion from licensing, roughly 6% of its sales, while Nokia’s licensing revenue totaled $2.3 billion, equal to 10% of its revenues. Both European vendors have shown steady growth since 2019, a testament to the value of SEPs in the evolving 5G market.
Market Implications and Challenges
As 5G continues to scale, SEPs are becoming a core economic lever in industries far removed from traditional telecom. Industrial IoT, automotive safety systems, and healthcare devices are emerging as lucrative licensing opportunities. SEPs for foundational 5G features—like OFDM-based air-interface technology—offer outsized financial and strategic advantages.
Critically, the LexisNexis report highlights the role of accurate and unbiased data in shaping this high-stakes licensing environment. Its Cellular Verified initiative uses a rigorous methodology to reconcile discrepancies in public ETSI declaration data and independently measure relative portfolio strength among 35 key SEP holders. Small variances in portfolio valuation can materially impact FRAND negotiations and global licensing strategies.
Notably, the report underscores how patent quality varies widely. A declared SEP may not always reflect core technological contributions, and counting patents alone often fails to capture a portfolio’s true commercial and technical value. For instance, while Huawei leads in declared patents for 5G Release 15, Qualcomm’s portfolio—built on acquisitions like OFDM pioneer Flarion—offers stronger value-adjusted metrics, according to LexisNexis’ Patent Asset Index framework.
Future Outlook: SEP Dynamics in the 6G Era
Looking ahead, the 5G SEP leaders are well-positioned to influence 6G’s development. As 3GPP Release 18 ushers in the first wave of 5G-Advanced, companies like Qualcomm, Huawei, LG Electronics, and Samsung are expected to remain dominant. With Huawei’s rising emphasis on 5G Advanced and Qualcomm’s continued leverage of foundational OFDM patents, the competitive landscape is unlikely to shift dramatically—barring disruptive changes or new entrants.
This long-term continuity underscores the growing financial and strategic significance of SEPs in defining value capture across interconnected industries.
For now, the $15 billion 5G patent licensing market remains a battlefield, with significant implications for telecom and adjacent sectors. As value pivots increasingly toward industrial IoT, automotive, and infrastructure, the stakes for accurate SEP valuation—and defensible FRAND discussions—will only grow.
Is your company prepared to navigate the complex 5G patent ecosystem, or will it cede ground in this critical race for value? Let us know your thoughts below.
