Mobile phone vendors looking to use Qualcomm components in their equipment, look like they’re going to be forking out heavily for the privilege. The chip maker has released a statement with its terms for royalty payments for handsets, looking for sums in excess of other chip vendors’ demands.
The company is looking at a royalty rate of 2.275% of the selling price of branded single-mode 5G handsets; and a rate of 3.25% of the selling price of branded multi-mode (3G/4G/5G) handsets. For a $500 handset that’s £16.25 in royalty fees.
Contrast this to the statement put out by Ericsson earlier this year in which it said it would charge just $5 per handset “in order to encourage the adoption of the standardized technology”, the company was even prepared to go $2.50 per device, if the circumstances warranted it – in other words, to kick-start a particular market.
IP claims
This is just another chapter in Qualcomm’s battles to protect its intellectual property. It is already fighting a lawsuit with Apple (to be strictly accurate, it’s fighting two – one as plaintiff, one as defendant) and is engaged in a takeover battle with Broadcom.
The Qualcomm demands for royalties will have a familiar ring about it: in its lawsuit, Apple claimed that “Qualcomm charged at least five times more in payments than all the other cellular patent licensors we have agreements with combined.” It remains to be seen how Qualcomm’s demands will be met in this particular case or what will happen to them if the Broadcom takeover succeeds.
