Linked by Thom Holwerda on Mon 2nd Jun 2014 12:45 UTC
PDAs, Cellphones, Wireless

iTnews points to a study performed by Joseph J. Mueller and Timothy D. Syrett of IP firm WilmerHale, and Ann Armstrong of Intel, which concludes that for an average $400 smartphone (no subsidies), patent royalty costs may be higher than component costs.

Indeed, the royalty data shows that the potential royalties demands on a smartphone could equal or even exceed the cost of the device's components. To be sure, for the reasons described above, many of the so-called "headline" rates on which these royalty figures are based may not withstand negotiation or litigation, but they have nonetheless been sought (and received) from some licensees. With the addition of royalties for the components/technologies for which we did not have sufficient data to include royalty figures, the total potential royalties would increase. Without access to the actual royalty figures paid by smartphone suppliers it is impossible to know for certain their magnitude. But our research demonstrates that they are likely significant. Indeed, the available data suggest that the smartphone royalty stack may be one important reason why selling smartphones is currently a profitable endeavor for only a small number of suppliers.

Let me repeat that last line for you - savour it and let it sink in.

Indeed, the available data suggest that the smartphone royalty stack may be one important reason why selling smartphones is currently a profitable endeavor for only a small number of suppliers.

Bingo. This is exactly why the patent system will never change: this construction benefits the large players immensely. Smaller players will have a hard time keeping up with the patent costs, since they most likely won't have much to barter with patent-wise. The result is less competition for established players.

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RE[2]: Re:
by kurkosdr on Tue 3rd Jun 2014 10:15 UTC in reply to "RE: Re:"
kurkosdr
Member since:
2011-04-11

WiFi was developed by Australian government radioastronomers at the CSIRO. They wanted to transmit data wirelessly within their own buildings.


Yes, the original -slow- WiFi. I am talking about all the inventions that evolved WiFi, just read my previous posts.

They could, there's no way to know. What we do know is that the 70's and 80's, and even the centuries before that, saw rapid scientific advances. In fact, scientific advances have been happening at an increased rate for a long time even before the patent system existed.

Rule of diminising returns. For example, inventing the original WiFi was relatively easy. Just use frequency hopping or DSSS, put a CSMA/CA system, and there, it's practically ready.

But developing something like 802.11n or 802.11ac and make it work in the real world is much more complicated, and requires much more R&D, and R&D will get more expensive as years pass.

Edited 2014-06-03 10:21 UTC

Reply Parent Score: 0

RE[3]: Re:
by unclefester on Tue 3rd Jun 2014 11:47 in reply to "RE[2]: Re:"
unclefester Member since:
2007-01-13

For example, inventing the original WiFi was relatively easy. Just use frequency hopping or DSSS, put a CSMA/CA system, and there, it's practically ready.


What a load of nonsense. The 'original' wif-fi specification was unusable in the real world. It required radioastronomers to develop novel methods to deal with 'smeared' signals caused by reflections. Only then could wi-fi be commercialised.

If you were around in the mid 90s you would be aware there was a frantic laying of co-axial and fibre cables in the ceilings and ducts of universities and offices to deal with the WWW and email. Wi-fi was considered almost a miraculous solution when it first arrived.

Reply Parent Score: 3