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Shenzhen-listed Transsion, the world’s fourth-largest smartphone maker, has been sued by Qualcomm and Philips for alleged intellectual property infringement.
Transsion, which has 48 percent of the smartphone market on the African continent and is expanding rapidly across the global south, is facing growing legal and commercial pressure from major US and European technology companies.
Qualcomm filed a lawsuit against Transsion, the manufacturer behind the Tecno, Itel and Infinix brands, in India earlier this week and has filed claims in Europe and China for alleged patent infringement. Philips has also sued Transsion in India, according to court filings.
Nokia, the Finnish telecom company, is also pressuring the Chinese company to start making payments for patented technologies used in Transsion phones, according to people familiar with the matter.
Ann Chaplin, Qualcomm’s general counsel, told the Financial Times on Friday: “Transition […] has refused to accept a license from Qualcomm for most of its mobile products, so we are pursuing a lawsuit to enforce our rights.”
“Qualcomm has sued Transsion [ . . . ] to protect our patent rights and help restore a level playing field for all our licensees,” added Chaplin.
Cell phones are full of components and technologies that have been developed and patented by multiple companies. Smartphone manufacturers are required to pay royalties to the owners of each piece of intellectual property. When these royalties are not paid, smartphone manufacturers can face legal action.
Transsion has followed an extremely low-cost business model to gain market share by undercutting rivals. The average Transsion smartphone sells for $110-$120, according to Counterpoint, a research firm.
Typically, the value of royalty deals from major smartphone makers to intellectual property owners is in the region of hundreds of millions of US dollars, according to an analyst.
A Transsion spokesman said it “respects the intellectual property rights of third parties” and added that the company is ready to reach an IP license agreement with patent holders through “friendly negotiations”.
“We have signed a 5G standard license agreement with Qualcomm and are in the process of fulfilling this agreement,” the spokesperson added.
In January, Philips filed an IP lawsuit against Transsion in India, another country where Transsion is trying to gain a foothold, according to court documents. Philips declined to comment. Transsion declined to comment specifically on the Philips case.
According to Chinese media reports, Chinese tech giant Huawei launched legal action against Transsion in China in 2019, also alleging IP infringement.
Transsion said in a statement that in some countries “some patent holders do not own – or only own a small number of – patents, but [they] require high licensing fees based on a uniform global rate, without taking into account factors such as differences in the level of economic development of different regions, their lack of patents in a particular region or market, or existing legal cases that provide fees different in different regions.”
While the company has also emerged as a top-selling brand in key growth markets such as Bangladesh, Pakistan and the Philippines, analysts say Transsion is now pushing into wealthier consumer segments with stronger patent enforcement regimes.
That includes phone sales in parts of Europe, including Hungary and Poland, as well as the Middle East, where it posted an impressive 194 percent year-on-year growth in the first quarter of 2024, according to the latest report. annual figures compiled by research firm Canalys.
Additional reporting by Eleanor Olcott