Chipset maker Qualcomm, telecom equipment companies Ericsson and Nokia will capture over 90 percent of total 5G smartphone royalties in 2025, according to a research report by Strategy Analytics.
5G handsets will generate almost $20 billion annually in royalties for intellectual property (IP) holders in 2025.
Juniper Research earlier said the number of 5G connections including 5G mobile and 5G broadband will reach 1.5 billion by 2025. The Juniper Research report indicates that 5G growth in the initial phase will be driven by South Korea and Japan, two small smartphone markets as compared with US, India and China.
A report from IDC suggested that smartphone market will reach 1.646 billion units in 2022 from 1.455 billion units in 2018 and 1.465 billion in 2017. The IDC report does not show any strong demand for 5G smartphones between 2018-2022.
GSMA earlier said Australia, China, Japan and South Korea in Asia will be powering the 5G market to reach 675 million 5G connections by 2025, more than half of the global 5G total expected by that point.
The chart prepared by Strategy Analytics shows the annual shipment of 5G smartphones from 2019 to 2025.
Strategy Analytics said key IPR holders have begun to reveal their licensing rates for the key technologies that will be powering 5G devices.
The US-based Qualcomm will take over half of 5G smartphone royalty revenue.
Ericsson and Nokia combined will take 35 percent of total global 5G handset royalties in 2025.
Sweden-based Ericsson is likely to charge $5 per 5G device. Nokia may charge $3.50 per 5G device. Qualcomm will take a percentage of the device’s price. Earlier, analyst reports said 5G smartphones will be costly for consumers.
The average selling price (ASP) of 5G smartphones will steadily decline over time, but even in 2025, 5G devices will be three times more expensive than non-5G handsets.
Total 5G IP royalties will account for approximately 7 percent of the total wholesale price of a 5G smartphone, which is in line with previous 4G IP costs.
The share of royalties going to the three 5G IP companies indicates both different approaches to licensing and their relative share of 5G IP.
Baburajan K
