5G iPhone will cost Apple a pretty penny

By

iPhone 5G
Making the 5G iPhone is going to be a complex and expensive business.
Graphic: Ed Hardy/Cult of Mac

There’s no doubt Apple will eventually make a 5G iPhone. The high-speed standard was finalized a few months ago, and wireless service providers are building 5G networks.

The next step is for the companies that developed the technology to decide what they’ll charge Apple and other phone makers to license their patents. The total might be more than you expect.

5G licensing fees add up

Nokia just. announced that it’ll charge a flat fee to use its 5G patents: $3.48 (€3) per device, according to iam.

Ericsson will ask for $2.50 to $5 per phone, depending on what the handset sells for. Varying the fee by the product’s selling price is typical.

Qualcomm wants the most. It will change 3.25% of the phone’s cost, with a cap at $400. So for most iPhone models it’ll be $13.

Huawei also has patents related to 5G, but has yet to reveal what the fee will be. That said, it’s more likely to be in-line with Nokia and Ericsson, not Qualcomm.

So the price of the 5G iPhone will have to include at least $21.48 in 5G licensing fees. While that might sound to some like a small amount, it’s more than Apple pays for the RAM chips in the iPhone 8, according to Tech Insights.

Inescapable 5G iPhone costs

These licensing fees will have to be paid no matter who provides the actual 5G modem in Apple’s future smartphone. They aren’t related to hardware, but cover the cost of using patents on the 5G standard itself. 

This isn’t a new concept. Phone makers have been paying licensing fees for 4G LTE patents for close to a decade.

That’s not to say the process is always a smooth one. Apple and Qualcomm have been arguing in court over 3G and 4G patent fees for years.