Strategy Analytics tipped Qualcomm, Ericsson and Nokia to capture more than 90 per cent of royalties from 5G handsets, which are expected to generate nearly $20 billion in annual revenue for patent holders in 2025.
Ville-Petteri Ukonaho, a senior analyst at the research company, said Qualcomm will lead the pack with more than half of 5G phone royalties. Ericsson and Nokia together will take home another 35 per cent, he added.
The difference in royalty share is reflective of both the companies’ relative share of 5G patents as well as their different licensing strategies, Strategy Analytics found.
Qualcomm, Nokia and Ericsson all laid out their 5G royalty terms in recent months. While Ericsson and Nokia set flat rates of $5 and $3.50 per device, respectively, Qualcomm said its rate will be based on a device’s selling price.
All told, Strategy Analytics said patent royalties will account for around 7 per cent of the total wholesale price of 5G smartphones, a figure it said is consistent with patent licensing costs for 4G phones.
The first 5G smartphones are expected to hit the market in early 2019.Subscribe to our daily newsletter Back