Shenzhen-listed Transsion, the world’s fourth-largest smartphone maker, is currently grappling with legal challenges from Qualcomm and Philips over alleged intellectual property violations. As Transsion holds a commanding 48 percent market share for smartphones across the African continent and expands rapidly throughout the global south, it faces increasing legal and commercial pressures from major U.S. and European technology firms.
Qualcomm filed a lawsuit against Transsion, the company behind the Tecno, Itel, and Infinix brands, in India earlier this week and has also lodged claims in Europe and China regarding purported patent infringements. Philips has similarly initiated legal action against Transsion in India, according to court documents. Additionally, Nokia, the Finnish telecom giant, is urging the Chinese company to start compensating for patented technologies used in its phones, according to sources familiar with the situation.
Ann Chaplin, Qualcomm’s general counsel, stated to the Financial Times on Friday: “Transsion has declined to accept a license from Qualcomm for the majority of its mobile products, so we are pursuing litigation to enforce our rights.” Chaplin added, “Qualcomm has sued Transsion to protect our patent rights and help restore a level playing field for all our licensees.”
Smartphones are intricate devices incorporating components and technologies developed and patented by numerous companies. Consequently, smartphone manufacturers are required to pay royalties to the proprietors of each piece of intellectual property. Failure to do so often results in legal action.
Transsion has gained market share with a markedly low-cost business model, underselling competitors. The average Transsion smartphone retails between $110-120, according to Counterpoint, a research firm. Analysts estimate that royalty agreements between large smartphone manufacturers and intellectual property owners typically run into hundreds of millions of U.S. dollars.
A spokesperson for Transsion said the company “respects the intellectual property rights of third parties” and expressed a willingness to reach an IP license agreement with patent holders through “friendly negotiations.” The spokesperson also highlighted that Transsion had signed a 5G standard patent license agreement with Qualcomm and is actively fulfilling that agreement.
In January, Philips filed an IP lawsuit against Transsion in India, another key market where the Chinese company aims to establish a significant presence. Philips declined to elaborate on the case, and Transsion also refrained from commenting specifically on the Philips lawsuit.
Previous issues with IP violations are not new for Transsion. According to Chinese media reports, Huawei launched legal actions against the company in China in 2019, also alleging intellectual property infringements.
In a statement, Transsion mentioned that in some countries, certain patent holders either do not own or own a minimal number of patents yet demand high licensing fees based on a uniform global rate. This approach, according to Transsion, fails to consider various factors such as differences in economic development levels, patent availability in specific regions, or existing legal cases that may offer different rates in different areas.
Transsion, recognized as the top smartphone brand in burgeoning markets like Bangladesh, Pakistan, and the Philippines, is now venturing into more affluent consumer segments, which come with stricter patent enforcement regimes. The company has begun selling phones in parts of Europe, including Hungary and Poland, as well as the Middle East, where it reported an impressive 194 percent year-on-year growth in the first quarter of 2024, based on the latest figures compiled by research firm Canalys.
