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5G phone royalty payments to generate US$20 billion in 2025

11:08:49 | 31 Aug 2018
5G phone royalty payments to generate US$20 billion in 2025
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BOSTON (IndoTelko)- 5G handsets will generate almost US$20 billion annually in global royalties for intellectual property (IP) holders in 2025 according to the latest research from Strategy Analytics.

Strategy Analytics’ Emerging Device Technologies research concludes that three companies, Ericsson, Nokia and Qualcomm will take the lion’s share of those royalties.

Qualcomm, Ericsson and Nokia will capture over 90% of total 5G smartphone royalties in 2025, according to Strategy Analytics research. Cumulative 5G Royalties will pass $55B.

While the first 5G smartphone launches are still months away, key IPR holders have begun to reveal their licensing rates for the key technologies that will power 5G devices. “Ericsson and Nokia combined will take 35% of total global 5G handset royalties in 2025,” says Senior Analyst Ville-Petteri Ukonaho. “Meanwhile Qualcomm will take over half.” Strategy Analytics research shows that while Ericsson and Nokia hope to charge $5 and $3.50 per device, respectively, Qualcomm will take a percentage of the device’s price.

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“The average selling price (ASP) of 5G smartphones will steadily decline over time, but even in 2025, 5G devices will still be three times more expensive than non-5G handsets,” says Emerging Device Technologies Director Ken Hyers.

The findings of this research are in line with royalty data for earlier generations of smartphones. “Based on this analysis,” says Ville-Petteri Ukonaho, “total 5G IP royalties will account for approximately 7% of the total wholesale price of a 5G smartphone, which is in line with previous 4G IP costs.”

The share of royalties going to the three key 5G IP companies indicates both different approaches to licensing and their relative share of 5G IP.(es) 

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