Hoping to appeal to Apple, Qualcomm lowers licensing cost for 5G patents

Hoping to appeal to Apple, Qualcomm lowers licensing cost for 5G patents
After hearing plenty of criticism over the last couple of years about its patent licensing system, Qualcomm announced this morning that it is switching to a different, lower cost licensing model for its 5G products. While aimed at all smartphone manufacturers, the focus is on Apple, which is involved in a number of suits against Qualcomm over patents and royalties. Apple reportedly decided to drop Qualcomm as a modem chip supplier for the 2018 iPhone models, and the San-Diego based chip maker would love to get that business back.

Smartphone producers have two licensing options when dealing with Qualcomm. They can license the latter's complete set of patents for 5% of a handset's cost, or license the standard essential patents for 3.25% of a phone's price. The standard essential patents cover the necessary parts required for a device to connect to a wireless network. Most manufacturers license both sets of patents to cover all of the bases. But Qualcomm has now made it easier for phone makers to license the standard essential patents only, while tossing in its 5G patents for free to those firms that license both sets.

Qualcomm has been forced to do this after settling with Chinese regulators in 2015. Over 100 handset manufacturers in the country signed up to pay 3.25% to license Qualcomm's 3G and 4G patents, a deal that was the result of the settlement.


Last week, Qualcomm did the entire industry a favor by announcing it would assess royalties on the first $400 of a phone's price. Previously, the cap was set at $500. "Alex Rogers, the head of Qualcomm’s licensing division, called his company's moves "regulator friendly." Rogers also alluded to two licensing issues that the company has, mentioning Apple by name as one of the manufacturers it is trying to work things out with. While he didn't mention the second company, it is believed to be Huawei.

Qualcomm recently was saved from a hostile takeover attempt when President Donald J. Trump, citing national security worries, ordered the end of Broadcom's attempt to purchase the Snapdragon chip producer for $117 billion. Qualcomm itself is awaiting regulatory approval from China to purchase NXP Technologies for $44 billion. That approval is believed to be a hostage to the U.S.-China trade wars.

source: Reuters

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2 Comments

1. Nimbus

Posts: 442; Member since: Apr 02, 2018

Good stuff but i wonder will there be 5G modems on 2019 midrange phones rather than always on flagship since they mention on their blog about 5G that next 2 years all smartphones will be with 5G modem to benefit off from faster data flow and less latency with huge data cap.I dont want midranges to be 5G compatible from 2020 onwards since i'm buying my new phone next year bcoz flagship price has gone up,I hope it would be otherwise i miss the 5G revolution next year and also they should implement the new WiFi standard ax next year on midrange phones which was unveiled just few month ago but i know as usual everything will be given to flagship phones next year with SD855 chip rather than on SD640 & SD710 chipset still shameful qualocomm lied about next year 5G network possibility and new wifi standard ax on all kind of smartphones aside from flagship phones.Look like all midrange smartphones from 2020 onwards will be future proof,i will see if i get wrong about it then i be happy about their commitment.

2. piyath

Posts: 2445; Member since: Mar 23, 2012

Trump FTW!!! Qualcomm should rightfully lower their insane royalty prices across the board. ASP of Android is about $200, small manufacturers are doomed if they continue to take advantage of their "patents".

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