Intellectual property holders will collectively reap $20 billion annually in global royalties from 5G smartphones in 2025, according to new research from Strategy Analytics. Three vendors are poised to capture the lion’s share, with Qualcomm, Ericsson and Nokia together accounting for more than 90 percent of total 5G smartphone royalties. Qualcomm will take more than half of all royalties, while Ericsson and Nokia combined will take 35 percent, the firm found. 5G smartphones are expected to start launching early next year, but IP holders have started to outline licensing rates. Nokia last week said it expects to license its portfolio of 5G NR standard essential patents to vendors at a rate of up to about $3.50 per mobile phone, and Ericsson hopes to charge $5 per device. Qualcomm, meanwhile, said it would charge 2.275 percent of the selling price for single-mode devices, and 3.25 percent of the selling price for multi-mode handsets—and cap the selling price at $400. “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 in a statement. According to Strategy Analytics, the figures line up with royalty data from earlier generations of smartphones, including previous 4G IP costs. The analysis found total 5G IP royalties will account for about 7 percent of the total wholesale price of a 5G smartphone. Earlier this month Sprint and LG said the companies are working to deliver the first 5G smartphone in the U.S. by the first half of 2019. Also this month, Verizon and Motorola announced a smartphone that could be upgraded to 5G via a clip-on module housing a 5G-capable modem. The 5G moto mod is expected to come out in early 2019, but pricing has not been announced yet.
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