While Apple is interested in introducing the technology to its products, the company will take its time before launching its 5G-compatible iPhones.
According to multiple reports, Apple will have to shell out around $21 per unit of 5G-equipped iPhone sold for licensing cost. For a 4G-equipped device, the average cost is just $9.60.
Apple may think that the extra cost in licensing may not be worth it. With smartphone sales on the decline, Apple might consider the licensing cost as another expense that will eat into its profit.
The licensing cost for 5G will go to several wireless companies that have invested to develop the technology. Qualcomm, Nokia, Ericsson, and Huawei have invested billions of dollars to develop the 5G standard and they have to recover their investments through licensing fees from companies that use the technology.
Apple To Shell Out $21 Per Unit For 5G Technology
Nokia plans to employ a flat rate of $3.48 licensing fee while Ericsson will charge between $2.50 and $5 per device depending on the handset. Qualcomm earlier planned to collect 2.275 percent of the price of a single-mode 5G handset or 3.25 percent of a multimode 5G unit's price. However, as a gesture of goodwill, Qualcomm reduced its capped handset price from $500 to $400, meaning the company would collect around $13 per unit for its 5G licensing fee.
The total licensing fee that will be collected by the three companies will be pegged at around $21.48, but Huawei has yet to disclose its fees. In June, Rotating Chairman Eric Xu pointed out that the company will follow the FRAND or fair, reasonable, and non-discriminatory principle in setting its licensing fee.
Xu also encouraged other 5G patent holders to implement transparent licensing rates that are lower than the 4G. Xu also stressed that Huawei will not burden other companies with its licensing fee.
Apple To Delay 5G-Compatible Phones Until 2020
Apple's delay will mean that Android phones will be the first to utilize the 5G technology. There were reports that Moto Z3 will support 5G once Verizon gives the go signal. Early next year, Americans will have a taste of the latest technology when LG offers its 5G handset via Sprint.
Based on a pronouncement by T-Mobile, 5G will offer speeds that are 25 percent to 50 percent faster than 4G LTE speeds. Also, download via 5G technology will be 10 to 20 times faster compared to the 4G system.