Friday, December 30, 2005

How Much are Cell Phone Royalties Really

This past month has seen quite an increase in news about complaints about overseas royalty payments, particularly the ones paid by Korean telecom operations:

1. A Dong-A artcile bemoaning the general royalty imbalance between Korea and the world. The Korean Electronic Association estimates "Patent-related expenditures of Korean flagship companies such as cell phone, MP3 player, monitor, and set-top box makers rose from $163 million in 2001 to $280 million last year."
2. An artcile in the Korea Times specifical bemoaning Qualcomm for its licencing structure for Korean handset makers.
3. More complaints in the Korea Times from an other IP holder, Interndigital Communications, for trying to increase its licecing schedule. Many makers complain that the move will force them out of business.

This last one got me, one would think that from these articles that these big foreign compaines are robbing Korean handset makers blind. However consider this article on Qualcomm in Forbes in November '05. The article includes a graphic spelling out the costs of making a basic handset:

Thats right we are only taking about 7% of the total costs. Meanwhile Samsung reports a gross margin on their handsets world wide of around 15% (it varies quarter to quarter). Yeah, Qualcomm is really bleeding this industry dry.


At January 25, 2006 1:44 PM, Anonymous fast cash advance said...

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