Smartphone royalties now equal manufacturing costs

Posted by freedomforall 11 years, 9 months ago to Business
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A new study, performed by two lawyers from intellectual property firm WilmerHale with help from a top Intel legal officer, suggests that the royalties now paid for smartphones rival the phone’s manufacturing costs. This, in turn, suggests that the current manufacturing and royalty systems aren’t sustainable in the long-term.

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  • Posted by dbhalling 11 years, 9 months ago in reply to this comment.
    That would actually result in slower adoption and if truly enforced probably be more expensive not to mention a nightmare to implement (actually impossible).

    Royalties for patents are not holding up the development or dissemination of technology. In fact, the exact opposite is happening. A lack of support for patents (strong property rights for inventions) is resulting in severe under-investment in new technologies. This also holds down what engineers get paid.
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  • Posted by freedomforall 11 years, 9 months ago in reply to this comment.
    Thanks for your comments, db. I thought you were knowledgeable in this area and was hoping you would share your views on this.
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  • Posted by dbhalling 11 years, 9 months ago
    I would argue that the IP cost of a smart phone is much higher than that. The raw materials in a smart phone are less than $5 and labor, distribution, etc might add another $15. The rest of the cost is really IP.
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