Total royalty payments for GSM, WCDMA and LTE technology on mobile phones are approaching $20 billion (£13 billion) per year, according to a new report from ABI Research. It says the amount paid in licensing fees by manufacturers will continue to grow for the next few years but is starting to flatten out. For example, the growth of 3G means that GSM handset royalties are already playing a much less significant role for royalty revenues.
ABI Research has calculated that vendors pay anything from less than 4% (if they have a very strong patent portfolio with bilateral agreements) to well into the teens for GSM/WCDMA handsets. The average fluctuates between approximately seven and eight per cent.
Philip Solis, research director for mobile networks at ABI Research, said “WWAN royalties on handsets are a significant source of revenue for companies holding the largest amount of essential patents. In addition to being a source of revenue for companies, patents are being used more aggressively for offense and defense against competitors.”