Autumn 2022. OPPO has just announced it is exiting the UK and German markets. Not pausing. Not reducing its product lineup. Exiting. The company that launched at the Louvre four years ago, that opened carrier partnerships in France and Italy, that was building the European retail infrastructure its smartphones deserved, is withdrawing from two of the continent’s most important markets because it cannot operate in them while an unresolved patent dispute blocks the sale of its devices.
The lawsuit that created this outcome was filed by Nokia in July 2021 in German courts, alleging that OPPO has been using Nokia’s 4G LTE and 5G standard essential patents without a valid license. Nokia has been pursuing similar actions against other Chinese manufacturers — Vivo, Lenovo, and others — as it monetizes its patent portfolio through litigation rather than through product sales, having exited the mobile handset business itself in 2014. The German court system, which has a well-established reputation for granting injunctions in SEP cases before licensing disputes are resolved, issued an injunction that blocks OPPO from selling devices in Germany. The UK withdrawal follows from a related injunction secured there.
The technical details of the dispute
Standard essential patents are patents that cover technology required to implement a telecommunications standard — in this case, 4G LTE and 5G. Every smartphone manufacturer needs these patents to make devices that connect to cellular networks. The regulatory framework governing SEPs requires that patent holders offer licenses on FRAND terms: Fair, Reasonable, And Non-Discriminatory. The dispute between OPPO and Nokia is over what constitutes fair and reasonable licensing terms. OPPO argues Nokia’s proposed rates are unreasonable. Nokia argues OPPO is refusing to license at any legitimate rate. The German court has sided with Nokia’s position pending resolution of the underlying licensing dispute.
Apple and Samsung have both faced Nokia SEP disputes and resolved them through licensing agreements. The difference in outcome is not primarily legal. It is negotiating leverage: Apple and Samsung have cross-license portfolios that give Nokia reasons to reach agreement. OPPO’s patent portfolio, while growing, does not provide the same negotiating leverage in European courts that Apple’s or Samsung’s does. This is a structural disadvantage for any Chinese manufacturer attempting to sell in markets with active SEP enforcement regimes.
What the exit actually costs OPPO
The cost is not just revenue from Germany and the UK in autumn 2022. The cost is momentum. OPPO has spent four years building European brand recognition from the Find X at the Louvre through the Find X2 Pro’s DxOMark leadership to the Find X5’s ambassador program. Every piece of that investment depends on OPPO maintaining a consistent presence in the European market. An OPPO exit from Germany and the UK creates a signal to potential customers in France, Italy, Spain, and the Netherlands — markets where OPPO is still operating — that purchasing an OPPO device carries a risk that purchasing a Samsung or Apple device does not: the software support, service availability, and carrier relationship may not survive a legal dispute that the customer cannot predict or control. That is a brand trust problem that is harder to solve than the legal dispute that created it.
As someone who covered the Find X5 as a product ambassador earlier this year, I am watching this carefully. The phone I reviewed is genuinely excellent. The brand story it represents is being interrupted by a legal battle that has nothing to do with the product. That is a specific kind of frustrating that people who follow Chinese smartphone brands in the West experience more often than the tech press acknowledges.
Part of OPPO: The Complete Story, my full history of OPPO from DVD players to the BBK empire.