High Handset Royalty Rates Currently Inhibiting Mobile Phone Markets

• Posted: Wednesday, January 10, 2007
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• Author: pradhana
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• Filed under: Miscellaneous

A new study from ABI Research has found that the currently high average handset technology royalty rates - particularly for WCDMA - are potentially the most challenging barrier that is preventing these markets from reaching their full potential. Royalties continue to form a significant share of handset bills-of-materials and present a challenge to the development of more affordable devices for the world's mobile consumers.

According to director of wireless research Stuart Carlaw, "The industry-accepted norm for cumulative royalty rates for consumer devices is 5%. WCDMA handset average royalty rates currently stand at 9.4%. Our research indicates, however, that current high rates for WCDMA are not the result of any one company's actions in the market but are a result of a flawed standardization process.

"The new report, "Mobile Handset Royalties" finds that the global WCDMA royalty revenues were in the region of $2.5 billion in 2006. Total handset royalty revenues are forecast to rise to over $10.0 billion in 2011 based on average cumulative royalty rates ranging from 3.8% to 8.5% depending upon the technologies in question.

Source: ABI Research

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