In emerging markets in Africa and South Asia, Transsion—not Apple or Samsung—is the smartphone manufacturer to beat. The Shenzhen, China-based smartphone manufacturer and its brands Tecno, Infinix, and iTel, account for almost half of Africa’s smartphone market. The company doesn’t even sell its lineup of budget and mid-range devices in China.
But Transsion is now in legal hot water, as major device manufacturers accuse the phonemaker of infringing their patents. Qualcomm, the U.S.-based chip designer, is the latest to target Transsion, suing the Chinese company in India last week, according to a filing in the Delhi high court. Transsion is trying to muscle into the Indian market after finding success in neighboring Pakistan and Bangladesh.
Transsion “declined to accept a license from Qualcomm for the majority of its mobile products,” Qualcomm general counsel Ann Chaplin told the Financial Times. That pushed the company to pursue litigation to “protect our patent rights and help restore a level playing field,” she said.
Qualcomm did not immediately responded to Fortune’s request for comment.
In a statement to Fortune, Transsion said it “respects the intellectual property rights of third parties and is willing to follow the principles of FRAND (Fair, Reasonable and Non-Discriminatory) to reach an intellectual property license agreement with patent holders”.
Transsion also claimed in its statement that some patent holders “do not own or only own a small number of patents” in some of the emerging markets where it operates, but still demand high licensing fees based on a global uniform rate without taking local factors into account.
Other companies have accused Transsion of infringing their intellectual property. Philips sued Transsion in India in January, reports the Financial Times citing court documents.
Even Chinese companies aren’t too happy with Transsion. Huawei, the Chinese telecoms giant, reportedly filed a lawsuit against Transsion in 2019, allegedly for infringing on its copyrighted wallpaper design.
Why patents matter
A phone consists of components and technologies that are developed and patented by several different companies. And as the smartphone market continues to grow, royalty fees can add up to be a significant source of revenue for patent-holders. Qualcomm, for example, generated $5.8 billion in licensing revenue in its 2023 fiscal year, 16% of the total.
Qualcomm sued Apple in 2017, alleging that iPhones and iPads infringed on the company’s mobile technology patents. The two settled the dispute in 2019.
Transsion started operations in 2006 and focused on emerging markets rather than compete in China’s already-crowded smartphone sector. The brand was one of the first Chinese mobile brands to enter Africa, leading to the moniker “Smartphone King of Africa.” Besides the Africa market, Transsion also sells phones in South Asia, the Middle East, Latin America and Eastern Europe.
Transsion phones reportedly do not use Qualcomm’s Snapdragon chips, and instead uses processors from MediaTek, a Taiwanese chip designer.
The company briefly became the world’s fourth largest smartphone firm by total shipments in the first three months of the year, according to market intelligence firm IDC, which cited its “aggressive growth in international markets.”
Transsion’s status as No. 4 didn’t last long. It’s no longer in the top five in IDC’s preliminary second quarter data, released Monday.
Update, July 15, 2024: This article has been updated with a comment from Transsion.
Credit: Fortune.com
