What? 15% GSM royalties?
asia.biz.yahoo.com
--Originally found on Rocket thread.-- Cooters
GSM Royalties Burdening Korean Mobile Phone Manufacturers
SEOUL, June 28 Asia Pulse - Local mobile phone manufacturers using the Global System for Mobile Communications (GSM) mode are under fire as foreign GSM patent holders are demanding sizable royalties for their licenses.
According to the industry Wednesday, global communications companies are targeting Samsung Electronics (KSE: 05930) for royalty payments for its use of their technology.
For Samsung the negotiation processes are quite different from the one it had with Qualcomm for the use of Code Division Multiple Access (CDMA).
There are 17 companies that utilize the globally recognized standard technology for GSM, including Motorola, Ericsson and Nokia, however Qualcomm alone holds most of the rights for CDMA.
"This year foreign firms are demanding royalties for GSM licensing and the amount accounts for 15 percent of the product price," a source from Samsung Electronics said.
The industry said foreign companies were waiting for local providers to grow dependent on their technology before making financial demands.
A US market research company Dataquest said Samsung Electronics held 4th place in the global mobile phone market last year and 8th place in the sales of GSM method wireless phones.
To cope with royalty burdens, Samsung Electronics is trying to barter cross licensing of its applied technology in wireless communication and semiconductors technology.
"Samsung Electronics holds licenses in wireless communication and semiconductor technologies, so it can arrange cross licensing, to lower its royalty payments," an industry source said.
Furthermore, LG Information & Communication (11650) is gearing up to introduce a GSM method phone in the second half of this year and is preparing for negotiations with foreign license holders.
"When they are through with Samsung Electronics, we are next, so we have already calculated royalties into our production cost," a source from LG said.
(YONHAP) |
