Patent wars could make smartphones dearer

Posted on October 24, 2010  /  1 Comments

Now that Android has taken a bigger market share than Apple in the smartphone market, the lawsuits are coming hot and heavy, according to the Economist.

Eventually, even lawsuits must come to an end. How much harm they will cause remains to be seen. If Apple wins against HTC, that would be bad news for upstart handset firms. Until a few years ago, HTC only made devices for others, but now it has become a brand of its own.

Litigation may also make smart-phones dearer. Mr White of Bristol York estimates that device makers already have to pay royalties for 200-300 patents for a typical smart-phone. Patent costs are 15-20% of its selling price, or about half of what the hardware components cost. “If 50 people [each] want 2% of a device’s value, we have a problem,” says Josh Lerner, a professor at Harvard Business School.

Isn’t it ironic that Apple, the great anti-establishment icon, is now the intellectual property absolutist? For those of who still remember the 1984 ad, this is another indication of the world turning out less idealistic than we thought.

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