Chinese phone makers appear to be struggling all over the world. Chinese smartphone makers are being pursued by other nations as well for unethical business practices. Germany is the most recent nation to take action against the questionable business practices used by several Chinese phone makers.
A German court has banned Oppo and OnePlus from offering their 5G smartphones for sale there. According to experts, similar bans will soon be enacted in other European Union nations.
The German court’s decision to impose a ban on Oppo and OnePlus was based on a patent dispute between Nokia and the Chinese phone makers, not on accusations of money laundering or economic misappropriation.
Many Chinese smartphone manufacturers are finding that the numerous 5G patents held by Finnish technological giant Nokia, one of the most well-known early mobile phone manufacturers, is causing them a great deal of trouble.
The German Mannheim District Court ruled in favour of Nokia in July of this year and concluded that Oppo and OnePlus lacked valid licenses for the 5G technology they were utilizing in their smartphones.
The court subsequently issued an order requiring the parties to agree on license fees; otherwise, it would have to impose a sales restriction on Oppo devices. And indeed, that is what happened.
Since both Oppo and OnePlus rely on economies of scale to manage their businesses, which means they keep very tight margins on each of the devices they sell but hope to make good money by selling a high quantity of them, this may be one of the reasons why they were unable to come to a licensing agreement.
Both of these smartphone manufacturers would have had to pay around 2.50 Euros per unit sold if they had chosen a licensing deal. Although it might not seem bad on paper, the fee would have eaten up a sizable chunk of Oppo and OnePlus’ profits in Europe given how little of a profit margin they both operate on.
Following this decision, there is a very good chance that other manufacturers from BBK Electronics, the parent company of Oppo and OnePlus, may experience a similar issue. BBK Electronics’ portfolio of smartphone brands also includes manufacturers like Vivo, iQOO, Realme, and others.
The end of the Eurotrip for the brands Oppo, OnePlus, Vivo, and Realme could be due to additional lawsuits brought by Nokia against the BBK group in the UK, Netherlands, Spain, France, Finland, and Sweden.
OnePlus responds after getting banned from selling smartphones in Germany
Germany recently banned the sale of smartphones made by OnePlus and Oppo. A patent dispute with the Finnish technology company Nokia is regarded as the reason for the same. Nokia is the owner of numerous patents. And this is the main reason for the problem.
Recall that the Mannheim District Court in Germany ruled in favor of Nokia in July and determined that Oppo and OnePlus lacked legal authorization to utilize the 5G technology in their devices. Additionally, the court had ordered that a licensing fee settlement be reached between the two businesses.
Sadly, no agreement could be reached, and on August 5 the Munich 1 court banned the sale of Oppo and OnePlus smartphones.
Now OnePlus has shared a statement on the same:
“OnePlus diligently complies with the laws and regulations in all markets where we operate. As a leading technology brand, we recognize the importance of intellectual property in driving innovation and highly value fair access to essential patents. Nokia’s demand for an unreasonably high fee is detrimental to this effect. We are actively working with the relevant parties to resolve the ongoing legal matter. While sales and marketing of the relevant products are on hold, OnePlus remains committed to the German market and will continue our operations. Meanwhile, OnePlus users in Germany can continue to enjoy our products and related services such as regular software updates and our after-sales service as before.”