Mobile Device Royalties

Intellectual Property Rates for GSM, WCDMA, and LTE

Cellular handset royalties play an important part in any company’s strategy regarding the handset segments they address. Intellectual property is fast becoming an important differentiating factor that enables a company to pick and choose where to play, while the lack of a strong portfolio significantly limits any company’s options and prospects for profit. While some have accused excess patenting of stifling innovation, the need for a strong IP portfolio has acted to spur major market players to new R&D efforts and greater innovation.

This study provides in-depth analysis of the royalty issues relating to all major cellular technologies, and offers exhaustive qualitative analysis of average royalty rates. This report also includes a comprehensive analysis of essentiality and also the net worth of the patent portfolio for each of the major technology sectors.

What Questions Does This Report Answer?

  • Who are the major IP owners?
  • What are average royalty rates?
  • How will these rates differ over time?
  • What is the total revenue from royalties?
  • What effects will royalties have upon market uptake?
  • What effect does royalty have upon devices cost?
  • How many patents are truly essential?
  • How valid are royalty rates when the value of wireless aspects only are considered?

Who Needs This Report?

  • Handset vendors
  • Silicon vendors
  • Cellular carriers
  • Regulators

Table of Contents


Section 1.
EXECUTIVE SUMMARY
1.1. Challenges Facing Current IPR Practice
1.2. Patent Body and Essentiality
1.3. Likely and Estimated Royalty Rates

Section 2.
STRATEGIC RECOMMENDATIONS
2.1. Recommendations to Standards Bodies and Governing Institutions
2.2. Recommendations to Patent Holders
2.3. Recommendations to Patents Licensees

Section 3.
ROYALTY BACKGROUND
3.1. The Role of a Royalty - Accessing Other Companies IP
3.2. Why Patents?
3.2.1. Defensive Patenting
3.2.2. Offensive Patenting
3.2.3. Organizational Patenting
3.3. Licensing and Royalty
3.3.1. Royalty Payment Structures
3.3.2. Cross Licensing
3.4. Royalty Benchmarking
3.5. What are Essential Patents?
3.6. Patent Quality
3.7. Patent Disclosure
3.8. Patent Thicketing
3.9. Proportionality Vs Value
3.10. The Nature of Royalty Negotiations
3.11. Royalty Dispute Resolution
3.12. Grant Back
3.13. License Stacking
3.14. Transparency
3.14.1. Of Essential Patents
3.14.2. OF License Terms
3.15. Fair, Reasonable and Non-Discriminatory Terms (FRAND)
3.15.1. Aggregated Reasonable Terms
3.16. Benchmarked Terms Based on Transparent License Terms
3.17. Litigation
3.18. Non-Manufacturer License Holders
3.19. Patent Trolls
3.20. Balancing Royalty Levels with Market Development
3.21. The R&D vs M&A Equation
3.22. Patent Expiration and Expiration Rates
3.23. Royalties, Patents and Innovation

Section 4.
RECENT ACTIVITY AND ITS IMPACT
4.1. Patent Pooling
4.1.1. Open Patent Alliance
4.1.2. LTE Patent Pool?
4.2. NGMN Royalty Initiative
4.2.1. Combining NGMN TTP Process with Patent Pools
4.3. Allied Security Trust
4.4. Mergers and Acquisitions
4.5. Nokia and Qualcomm
4.6. Qualcomm and Broadcom
4.6.1. Motivation, Effect and Outcome
4.7. Nokia and Interdigital
4.8. Samsung and Interdigital
4.9. The Changing Nature of the Device: The Shift Away from Pure Voice
4.10. The Introduction of New Device Segments
4.11. Multi-Modality

Section 5.
COMPANY PATENT HOLDINGS
5.1. Introduction and Methodology
5.1.1. The Precedents Used
5.2. GSM/GPRS/EDGE
5.2.1. Declared Essential Patents
5.2.2. Broadcom/Qualcomm Precedent Related Analysis
5.2.3. Nokia/Interdigital Precedent Analysis
5.3. WCDMA/HSDPA/HSUPA
5.3.1. Declared Essential Patents
5.3.2. Broadcom/Qualcomm Precedent Related Analysis
5.3.3. Nokia/Interdigital Precedent Analysis
5.4. LTE/4G
5.4.1. Total Patent Body
5.4.2. Essentiality Analysis with WCDMA Precedent
5.4.3. Broadcom/Qualcomm Precedent Related Analysis
5.4.4. Nokia/Interdigital Precedent Analysis

Section 6.
CUMULATIVE AND AVERAGE ROYALTY RATES
6.1. Introduction and Methodology
6.2. GSM, GPRS, EDGE
6.3. WCDMA/GSM Multimodal Products
6.4. Royalty Rate Analysis Based on Worth
6.5. Royalty Rate Analysis Based on Essentiality Analysis
6.6. LTE

Section 7.
APPENDIX A

Section 8.
APPENDIX B

Section 9.
COMPANY DIRECTORY

Section 10.
ACRONYMS
SCOPE OF STUDY
SOURCES AND METHODOLOGY
NOTES



Tables
  • Declared Essential Patents and Essentiality Analysis,
  • Likely Royalty Rates and Adjusted Royalty Rates According to Worth and Essentiality,
  • GSM Declared Essential Patents by Company,
  • GSM Declared Essential Patents After Broadcom/Qualcomm Precedent Analysis,
  • GSM Declared Essential Patents After Nokia/Interdigital Precedent Analysis,
  • WCDMA Declared Essential Patents by Company,
  • WCDMA Declared Essential Patents After Broadcom/Qualcomm Precedent Analysis,
  • WCDMA Declared Essential Patents After Nokia/Interdigital Precedent Analysis,
  • LTE Relevant Patents and Patent Applications,
  • LTE Essential Patent Illustration,
  • LTE Declared Essential Patents,
  • LTE Essential Patents Indication After Broadcom/Qualcomm Precedent Analysis,
  • LTE Essential Patents Indication After Nokia/Interdigital Precedent Analysis,
  • GSM Likely Royalty Rates by Portfolio Strength,
  • GSM Average Royalty Rates by Region,
  • WCDMA/GSM Multimode Likely Royalty Rates by Portfolio Strength,
  • WCDMA/GSM Multimode Average Royalty Rates by Region,
  • WCDMA Component Likely Royalty Rates by Portfolio Strength,
  • WCDMA/GSM Multimode Device ASPs,
  • WCDMA/GSM Multimode Royalty Analysis Based on Value of Wireless Component,
  • WCDMA/GSM Multimode Royalty Analysis Based on Essentiality Analysis,
  • WCDMA/GSM Multimode Royalty Analysis Based on Essentiality Analysis plus Value of Wireless Component,
  • LTE Likely Royalty Rates,

Charts
  • GSM Declared Essential Patents by Company,
  • WCDMA Declared Essential Patents by Company,
  • LTE Relevant Patents and Applications,

Figures
  • TPP Notification Process in NGMN