Qualcomm has announced the license rates that it wants manufacturers of mobile devices to pay to the company if they wish to gain access to its 5G intellectual property. According to the semiconductor and telecommunications equipment company, a royalty rate of 2.275 percent of the selling price will apply to branded single-mode 5G mobile devices while the royalty rate for branded multi-mode (3G/4G/5G) handsets is 3.25 percent. The royalty terms are applicable on a global basis to handsets that use the 5G NR (New Radio) standard up to and including release 15 of the 3GPP (3rd Generation Partnership Project) specifications.
Keep in mind that these licensing rates are in accordance with the cellular license deals Qualcomm used for 3G and 4G branded handsets sold in China since 2015, and the chipmaker vowed to keep the royalty rates currently effective under those deals the same once the company incorporates later releases of 4G and the pilot release of 5G into future negotiations over the coming years. Currently, Qualcomm is in a legal battle with Apple after the Cupertino, California-based phone maker accused the semiconductor firm of excessively charging original equipment manufacturers for license to its patents. Earlier this year, Apple sued Qualcomm for $1 billion over allegations of unfair business practices. In addition to Qualcomm's licensing program for cellular essential patents, the company said it will continue to license its more than 130,000 patents and pending applications worldwide for 4 percent of selling price for branded single-mode handsets and 5 percent of the selling price for branded multi-mode mobile devices.
Additionally, Fierce Wireless reports that Qualcomm plans to charge original equipment manufacturers a royalty fee of up to $16.25 for every 5G-enabled devices they sell, as the company keeps its cap on the rate for handsets at $500. This is despite the fact that Qualcomm said it expects 5G handsets to be commercially available in 2019 and it remains unclear what patents owned by Qualcomm will be incorporated into the mobile devices in the future. Also, the 5G standards are yet to be finalized by the 3GPP, which kicked off its studies on 5G New Radio in April of this year shortly after the consortium agreed to speed up the timetable for 5G standards development to authorize large-scale testing and deployment of 5G networks by 2019.