We are nearing the commercial deployments of 5G, one of the next-gen technologies that fall under our Disruptive Innovators investing theme. By sharing its 5G essential patent licensing rates, Nokia is offering one of the firmest signals that 5G devices will soon be a reality. Initial shipments are expected to begin in 2019 and reach more than 1.5 billion by 2025, which means not only vibrant outlook for Nokia and other core 5G IP holders but a powerful upgrade cycle that will benefit Digital Lifestyle and Digital Infrastructure companies.
With 5G NR devices set to hit the market next year, and supporting networks under construction around the world today, Nokia this week detailed the expected licensure rate for standard essential patents that the infrastructure vendor controls. The company said it will cap fees at €3, $3.46 based on current exchange rates, per 5G NR device.“
Nokia innovation combined with our commitment to open standardization has helped build the networks of today and lay the foundations for 5G NR,” Ilkka Rahnasto, head of Patent Business at Nokia, said in a statement. “This announcement is an important step in helping companies plan for the introduction of 5G NR capable mobile phones, with the first commercial launches expected in 2019.”
Qualcomm is another major 5G NR patent holder, and the company derives significant income from licensing its standard essential patents. Last year the San Diego-based chipmaker laid out its fee structure
.OEM branded handsets will have an effective run rate of 2.275% of the selling price for single-mode handsets, and 3.25% of the selling price for multi-mode devices. To give some hypothetical pricing, a patent licensing for a $100 multi-mode device would cost an OEM $3.25, while a $200 multi-mode device would cost the OEM $6.50. The company capped royalties at a $500 selling price, which equates to $16.25 for a multi-mode device.