There are no 5G network devices on the market yet. However, this does not prevent particular companies from estimating the revenues generated by the patent fees. Nokia (the real one that produces base stations) has just estimated its profit from licence fees for patents with a standard meaning for the 5G NR standard. For mobile devices, including smartphones, they will be around 3 euros for each unit.
Why should Apple, Samsung, Xiaomi and other smartphones manufacturers pay Nokia for each smartphone sold, which will have a 5G modem? Licence fees for patents with a standard meaning are calculated on the basis of the company’s contribution to the development of the new standard. This also applies to standards developed by the 3GPP organization. Technical solutions that make up the 5G NR standard have been mainly developed by employees of individual telecommunications companies. Therefore, anyone who intends to use these solutions will have to pay the appropriate licences. In this way, companies whose employees have developed a new standard will get a kind of “redress”. In practice, we are dealing here with a typical return on investment, which was funds allocated for research.
Nokia will receive 3 euro licence fees for each 5G smartphone
The first 5G smartphones will appear in stores next year. However, at the beginning they will be few and expensive models. 5G modems should become popular at the turn of 2019/20, and that’s when Nokia (and other patent owners) should expect the first concrete profits from the sale of smartphones. It is also good news for investors who were disappointed with the latest financial results of the Finnish giant.
Other companies will also earn on patents related to 5G networks. Samsung, Ericsson, Huawei, or Qualcomm also worked intensively on the new standard. Patents related to mobile devices also have such companies as Google or Microsoft. As you can see, you do not need to make smartphones to earn money selling them.