4G royalties to reach €4.6b by 2017
As LTE networks gain traction worldwide, royalties from 4G cellular technologies are expected to grow fourfold between 2012 and 2017 to reach $6 billion (€4.6 billion).
As 4G royalties grow, the balance of power could shift in the great patent wars waging across the handset sector, according to ABI Research.
Most notably, Apple has been on the offensive with its patent vendetta, chiefly against Samsung, but may be put in the back foot now it has launched the LTE-enabled iPhone 5 due to Samsung's lead in LTE patents.
ABI research director Phil Solis noted that Samsung is likely to seek to use its 4G patent power against Apple. “The only problem is that mobile technology patents for LTE are subject to FRAND rules,” he said.
FRAND rules compel holders of standards essential patents to license their use on a fair, reasonable and non-discriminatory basis. Samsung has already lost some patent claims against Apple due to its FRAND obligations.
ABI Research expects handsets to contribute to the majority of growth of 4G royalties going forward, due to the limited growth of 4G data devices and the differences in the way royalties are applied to handsets as opposed to data services.
One factor limiting the inclusion of LTE connectivity for non-smartphone consumer electronics is the cost of mobile technology royalties, ABI said.
But once it becomes economically feasible to launch LTE-only CE devices, this could change, as it would eliminate vendors' needs to also pay 2G and 3G royalties.