An estimate of the average cumulative royalty yield in the world mobile phone industry: Theory, measurement and results

Alexander Galetovic, Stephen Haber and Lew Zaretzki

Telecommunications Policy, 2018, vol. 42, issue 3, 263-276

Abstract: An influential literature argues that dispersed patent ownership may lead to royalty stacking and excessive running royalties, thus increasing the long-run marginal cost of manufacturing phones and their prices. One set of estimates claims that the royalty stack is on the order of 20–40 percent of the value of the average phone. In order to assess this claim, we estimate the average cumulative royalty yield—the sum total of patent royalty payments earned by licensors, divided by the total value of mobile phones shipped— in the world mobile phone industry between 2007 and 2016.

Date: 2018
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DOI: 10.1016/j.telpol.2018.02.002

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