Royalties are a significant contributor to the costs of mobile handsets. As phones get more complicated and contain more components, a bigger amount of the cost of each phone goes towards royalties paid to patent holders. This makes it hard for manufacturers to create low cost phones for developing markets. It also creates market inequity as companies who are significant patent-holders, like Nokia, enjoy significantly lower production costs than other makers.
Royalties create headaches for makers and they are looking for solutions. That hasn’t stopped them from fighting for new patents as new fields of future revenue develop in the industry. Makers need the new patents not just to develop new revenue, but also to put competitors at a competitive disadvantage.
The latest field for a patent war is mobile e-mail. Push e-mail is currently at the forefront, with integrated messaging incorporating e-mail, voicemail, instant messaging and SMS following close behind. Future technology like videomail and the integration of existing technology into new interfaces are also hot.
Intellectual property is more important than ever. That is what is behind moves such as Nokia’s takeover of Intellisync. Much more important than the existing Intellisync business are the 60 patents the company holds and the licensing relationships that existed with the company. For example, Qualcomm, a major competitor of Nokia, has built their mobile e-mail program, Eudora2Go, on a platform provided by Intellisync. Nokia has a range of options that they can now pursue to make life difficult for their competitor.