Smartphone vendors will have to pay as much as $16.25 per device to use Qualcomm’s 5G New Radio (NR) technology under new royalty guidelines released by the company.
Qualcomm said it will implement a royalty rate of 2.275 per cent of the selling price for single-mode 5G handsets and a higher rate of 3.25 per cent for multi-mode smartphones with 3G, 4G and 5G capabilities.
So for a $200 multi-mode device, for instance, Qualcomm noted a vendor would have to pay $6.50 in royalties per device. Royalties are capped at a $500 device value, meaning the maximum amount a smartphone vendor would have to pay would be $16.25 per handset.
The company added it will also offer access to its portfolio of both cellular standard essential patents and non-essential patents at a rate of 4 per cent of the selling price for single-mode devices and 5 per cent for multi-mode devices.
Qualcomm’s rates are notably higher than those announced by Ericsson in March. The Swedish company said it would charge a flat royalty fee of $5 per 5G NR multimode handset, but noted its fee could go as low as $2.50 per device for handsets with low average selling prices.
Qualcomm unveiled its 5G-ready X50 chipset in October 2016 and said it expects initial 5G handsets to become commercially available in 2019.
The royalty rate announcement comes as Qualcomm continues to duke it out with Apple in a high profile dispute over the chipmaker’s patent licensing terms during which Apple accused Qualcomm of charging “at least five times more” than other licensing deals in payments than all other cellular patent licensors we have agreements with combined”. Qualcomm denied allegations of unfair patent practices.
The increasingly heated battle, though, has hit Qualcomm in the purse. In Q3, the chipmaker’s licensing revenue dropped 36 per cent year-on-year to $1.2 billion and for the full fiscal 2017 year fell 16 per cent to $6.45 billion.