Qualcomm CDMA Patent Fee Is on a Declining Curve

Published:2011/1/25 0:39:00 Author:Amy From:SeekIC

In the past years, Qualcomm reduces the fee of patent for cell phone manufacturers year by year. As a result, the price of CDMA mobile phone is going down consistently.
Some manufacturers are sick of high patent fee

According to the prediction of “Forbes”, patent charges of most cell phones will decline gradually. In addition, NOKIA and some emerging leading mobile phone manufacturers such as SINS have already been sick of Qualcomm’s high patent price. Besides, higher patent price may push mills to choose competitors of Qualcomm like Texas Instruments, Broadcom and Infineon.
NOKIA and Qualcomm have been disputing for high patent charge from 2005 to 2008. Although the final number of consultation did not disclose, many industry observers estimated that it would be close to 2% which is much lower than other clients of Qualcomm. So they may require renegotiation with Qualcomm. Another case is SINS of India which had been suing the Qualcomm for higher patent fees in past years. If other manufacturers resorted to GSM technique just as SINS did, it would have been a great impact to Qualcomm.
The significance of emerging market

Some developed countries including America and Europe have been close to saturation on mobile penetration rate, while China, India and Latin America with emerging markets have large population base and continuously increasing GDP which can be expected a great growth in the use of CDMA in the future. However, the average price of will be much lower in emerging market in accordance with much lower patent fee by Qualcomm, yet the growth of overall sales in these markets are much higher than patent fees contributed by some developed countries. Therefore, it is predicted that Qualcomm will reduce the fee of patent if it wanted to retain important customers, especially in the emerging markets.
Trefis from U.S. Equity Research Company believes that the fee of CDMA mobile phones patent will reduce by 3.4% from 3% in 2011.
To sum up, in case of losing customers, Qualcomm will slowly decrease the patent charge to occupy the market share of CDMA cell phones. The related integrated circuit is NJM2115.

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