Several Chinese phone makers are banding together to fight potential patent lawsuits, as market giants like Apple enter emerging markets sparking fear of impending patent lawsuits.
Lenovo, Coolpad, ZTE, TCL, and Konka are among the Chinese companies forming the alliance, according to DigiTimes.
Major manufacturers like Apple, Nokia, and Microsoft plan to expand their market share in China and the national companies seek to learn from the example of earlier market expansions into Europe and Australia, which kicked-off a flurry of patent infringement suits.
Microsoft’s efforts to secure a patent licensing deal with Chinese phone maker Huawei may be a harbinger of what the alliance plans to avoid. Huawei may end up paying Microsoft millions in patent royalty fees as it expands worldwide.
The smartphone market in China is one of the fastest growing in the world, and shipments of mobile devices exceeded 24 million in the third quarter of 2011, surpassing the U.S market. Major companies like Apple want to get in on the action and establish a solid customer base as the mobile market in China continues to expand.
But arrival of major powers in China are sparking fears of legal wrangling as well, especially as patent lawsuits ramp up around the globe.
Apple has proved nearly relentless in its litigation against makers like Samsung in other parts of the world including Germany, France, and Australia, where it remains embroiled in dozens of patent lawsuits against other phone makers.
Patent lawsuits over smartphone and tablet similarities often lead smaller phone makers to settle for licensing deals, an easy way for giant companies to increase their presence and revenue in emerging markets. But Chinese phone makers are joining forces in advance of the expected litigation, hoping to avoid or minimize the potential damages by standing strong.
Huawei, while not thought to be part of the alliance, refused to back down to Microsoft’s threats, reminding the world they “are a very important stakeholder in Android” and saying the company’s 65,000 patents worldwide will protect their interests.
But if maneuvers like the Chinese alliance of phone makers gain traction, regional makers and carriers in other emerging markets like the Middle East could follow suit, making it more difficult for companies like Apple, Google, and Microsoft to use patent lawsuits as a way to gain entry.