It seems that Chinese smartphone makers worldwide are having a rather hard time. India isn’t the only country going after Chinese smartphone makers for inappropriate business behavior. Germany is the latest country to go after the questionable practices that confident Chinese smartphone makers follow.
A German court has banned Oppo and OnePlus from selling their 5G smartphones in the country. Experts believe that other European Union countries will soon come up with a similar ban.
The reason behind the ban that the German court imposed on Oppo and OnePlus doesn’t have anything to do with money laundering or misappropriation of funds but a patent dispute between Nokia and the Chinese smartphone makers.
Finnish technology major Nokia, one of the most prominent early mobile phone makers, has a ton of patents on 5G technology in its arsenal, which is becoming a massive headache for several Chinese smartphone manufacturers.
In July this year, the Mannheim District Court of Germany ruled in favor of Nokia and found that Oppo and OnePlus did not have valid licenses for the 5G technology that they were using in their smartphones.
The court then ordered both the parties to settle on terms of licensing fees, failing which it would be forced to impose a sales ban on Oppo smartphones. And that is precisely what happened.
One of the reasons why Oppo and OnePlus couldn’t reach a licensing deal may be because both these smartphone makers rely on economies of scale to operate, meaning that they keep a tiny margin on each of the devices that they sell but hope to make good money, by the sheer number of devices they sell.
Had they gone for a licensing deal, both smartphone manufacturers would have to pay about 2.50 Euros per device they sold. On paper, it might not sound that bad, but when you consider how slim of a profit margin both Oppo and OnePlus operate on in Europe, the fee would have taken a significant portion of their profits.
Following this ruling, there is a good chance that other manufacturers from Oppo and OnePlus’ parent company, BBK Electronics, may face a similar problem. Other smartphone brands in BBK Electronics’ portfolio include the likes of Vivo, iQOO, Realme, etc.
Due to more lawsuits by Nokia against BBK group in the UK, Netherlands, Spain, France, Finland, and Sweden, this could mean the end of the Eurotrip for Oppo, OnePlus, Vivo, and Realme brands.