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How expensive is the patent fee: $400 for mobile phones and $120 for mobile phones
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Release time:2016-05-09
No wonder Xiaomi is unwilling to pay royalties. If it is, a mobile phone will cost more than 700 yuan. How to calculate the patent license fee? It is an economic problem.
"There is no problem in completing more than 90 million shipments this year." Xiaomi founder Lei Jun said after the sale of the latest high-end model (Note top version). According to data from the market research organization IDC, in the first quarter of 2015, Xiaomi's shipments in the Chinese market have followed Apple, ranking second.
Behind these stormy data, in addition to Xiaomi's latest valuation of up to $45 billion, there is a growing risk of patent litigation.
After Qualcomm accepts antitrust penalties, Xiaomi's patent short board will gradually become a reality. History has shown that the higher the market share, the higher the risk of litigation. It is foreseeable that if Xiaomi's market share continues to rise, it will only be the beginning to be targeted by Ericsson in India. This weakness, like a time bomb, can explode at any time in the most vulnerable moments of the enterprise. The difference is that in the past, the fuse was only in the hands of Qualcomm. Now, it is scattered among a dozen peers. Everyone is waiting in silence, the first person to light the lead.
President of Qualcomm Greater China Joins Xiaomi
As the leader of baseband chip manufacturing and mobile communication patents, Qualcomm's most impressive sign in the industry is its headquarters in San Diego (SanDiego), with a "patent wall" with more than 1000 certificates on one side ". But the patents on the wall are less than 1/10 of the entire Qualcomm patent pool.
Millet in the first few years of development, almost no patent reserves. But by buying Qualcomm chips, invisibly insured, no other company can sue Xiaomi for patent infringement.
This is because of the "free reverse license"-Qualcomm used to rely on this way to maintain its downstream ecological chain, to avoid downstream mobile phone manufacturers into repeated litigation. For example, if a mobile phone manufacturer uses Qualcomm's chips, they have to license their own patents to Qualcomm free of charge. when Qualcomm's chips are sold to other mobile phone manufacturers B, B will no longer have to pay royalties to the original mobile phone manufacturer, and a cannot go to court to sue B for infringement.
In the view of the industry, the above model is more favorable for the rapid growth of enterprises with less patent reserves in the early stage of establishment.
Now that rule has changed. In the punishment information released by the national development and Reform Commission, a series of rectification measures of Qualcomm were listed, including "not requiring Chinese licensees to carry out free reverse license of patents". In recent years, millet has begun to consciously buy patents, but the existing patent reserves are obviously far from enough.
Even if it is only sold in the Chinese market, the risk is beginning to magnify. In order to build a complete patent defense system, Xiaomi may increase the cost of expanding the legal department, the cost of applying for and maintaining patents, the cost of obtaining licenses or purchasing patents, and the cost of responding to litigation. From the overall strategy, the competition for the market cake will become more intense in the future. If competitors want to use patent shortcomings to suppress the development of Xiaomi, it is a very deterrent means.
Not to mention, in the international communication terminal market where love and kill each other fiercely, Motorola, HTC, Blackberry, Nokia, Samsung, and Apple have become commonplace in the US and European markets to sue each other. A group of enterprises accompanied by fierce fighting, defeated, or even disappeared. Apple has sued Samsung, Motorola, HTC and other companies for patent infringement in the world. The important criterion for selection is market share. And these indicted bosses, each with a patent reserve, are far more than millet several orders of magnitude.
In the future, after the developing market is also close to saturation, the high-end market with high protection of intellectual property rights such as the United States and Europe will become the key to the survival of Xiaomi. Among Android phones, HTC, which was once the world's largest share, was also attacked by rivals at the most competitive development intersection after entering the US market, and began to gradually show its decline.
Even Chinese companies such as Huawei and ZTE, which have large patent reserves, will encounter the first hurdle when entering developed markets: the cost of a large number of NPEs (non-practicingentity, non-implementing entities). NPE does not produce products, but actively applies for and acquires patents and generates profits through litigation and other means. These companies will come to the door to collect royalties from the manufacturers of their products, or they will file lawsuits. The amount of the settlement generally claimed is always below the legal and attorney's fees that may be incurred. After Qualcomm is punished, this trend may be aggravated.
This is why Xiaomi Technology faced the online store officially launched in the European and American markets on May 19. The products on the shelves were all accessories and lacked patent-intensive smartphones. Even accessories may involve some core patents.
Now, to overcome the patent shortcomings, there are several ways in front of Xiaomi: First, as ZTE and Huawei have done, continue to pay license fees and purchase patents; second, increase R & D investment and apply for their own Patent; third, learn from Lenovo and go to the international acquisition of peer companies with a large number of patents. For example, the precarious Blackberry.
Of course, the premise of choosing these roads is that Xiaomi's dream is really big enough to let "Thunder English" one day go to the platform of the new product launch conference in the United States.
However, millet, which has only been founded for five years, is already a rapidly developing Chinese star enterprise. Reaching investor expectations is not easy. In order to break through the gradually saturated Chinese smartphone market, in China, Xiaomi has developed smart home and TV as new business support points. In addition, it is also building the concept of "Internet", investing more, and launching diversified products such as smart bracelets and chargers branded with Xiaomi. In the international market, millet has entered Singapore, India and other markets, and achieved good results.
This kind of "Jianghu status" objectively also makes Xiaomi pay more attention to the risks of patent litigation. On June 10, Lei Jun announced on his certification Weibo that Wang Xiang, president of Qualcomm Greater China, will join Xiaomi as senior vice president, responsible for strategic cooperation and important partnerships. Xiaomi said that Xiaomi and Qualcomm have maintained a long-term and close strategic partnership. Qualcomm is Xiaomi's "very important chip supplier, Qualcomm is also one of Xiaomi's early investors".
In the view of industry insiders, this international Chinese senior with sufficient experience in intellectual property rights may help Xiaomi find a breakthrough in the patent field. However, freezing three feet is not a day's cold. The construction of intellectual property system requires money investment and opportunity. If the internal strength is as weak as Chinese football, even if the international first-class coach is drawn, I am afraid he will not have the skills to return to heaven.
What is more worrying is another bigger story: when the Chinese innovative Xiaomi latecomers encounter a high-pass patent wall.
$400 cell phone and $120 royalty
American high-tech companies such as Qualcomm and Apple are often willing to spend decades and continue to invest in capital and manpower to build basic technological advantages. Qualcomm and Intel represent the core competitiveness of global semiconductors-hardware patent walls and manufacturing capabilities; Apple and Google represent the core competitive advantage of smartphones-high-end software operating systems (IOS and Android). The accumulation of these bottom core areas is like the soil of innovation, which is the fundamental measure of whether a country can grow a leading enterprise.
Unfortunately, compared with the American giant enterprises, China's semiconductor industry and software operating system field are very backward. Graduates of basic disciplines such as electronic information engineering, which are popular in the American talent market, often cannot find jobs that meet their majors and reasonable salaries in China. An obvious reason is that these basic industries tend to have large investments, long payback periods and limited yields compared to Internet companies that go to NASDAQ listings or financial industries with generous commissions.
Therefore, most active Chinese companies are still accustomed to "following innovation" and make profits by participating in the assembly process and making small profits but quick turnover. To put it more down-to-earth, the people who make smart phones in China are like those who saved computers in Zhongguancun, Beijing 10 years ago. First draw a rough sample, and then buy and assemble the parts of various major international factories that meet the demand. The only difference is that the foundry process of smartphones (including patch and assembly) also requires a certain technical content. If you don't have your own factory, you have to pull Foxconn, Yingdahua or Huaqin. Of course, some enterprising enterprises, such as Xiaomi, are still trying to build brands or build ecological chains.
It is conceivable that, in addition to Huawei, ZTE and other less examples, these smart phone companies and millet, to increase the patent reserves. If it is simply reflected in the production of enterprises, that is, in addition to purchasing core components, these manufacturers have to pay huge royalties for these components. At the end of last year, a 66-page report co-authored by two smartphone litigation lawyers and an Intel executive showed that for a smartphone priced at $400, the combined cost of various patents was as high as $120., Even more than the cost of parts for the device. Among them, the baseband chip components produced by Qualcomm are one of the most expensive in the industry.
Therefore, most of what consumers see in the Chinese market is that they keep up with the footsteps of overseas leaders, batches of homogeneous brands and products that lack core technologies, and batches of counterfeit copycat mobile phones, accompanied by market share. Ebb and flow, constantly falling into a cycle of rise and fall.
According to the statistics of ICWISE (core research), in 2014, the global smartphone market size is about: 0.29 billion units in Europe; Department of 0.13 billion in the United States; South Korea's 20 million Department; And China is 0.42 billion. Another set of figures is not so optimistic, because this growth rate has begun to slow down significantly, and as the number of competitors increases, the rate of slowdown will gradually accelerate in the future.
According to a report by an industry organization, China's mobile phone market shipped about 0.11 billion units in the first quarter of 2015, down 3.7 per cent from a year earlier. Among them, the smartphone market shipped about 0.1 billion units, down 2.5 year on year. This is the first time in the past six years that China's smartphone market has experienced a quarterly year-on-year decline.
In fact, when home appliance star companies Gree, Luo Yonghao, and radio and television challenger Letv all began to flock into the mobile phone field, calm bystanders had already labeled this field as "Red Sea.
The concern of the outside world is whether there will be such a group of enterprises that may be forced out of the market because of the decline in profits brought about by the price war before they reach the "Jianghu status" like Xiaomi.
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