With a legal and economic backdrop, and focus on my
specialised subject of standards and patents, the event provided an ideal opportunity
to present updates on the rude health of the smartphone and mobile services
markets. These are clearly the most SEP-intensive product and service markets
in existence: including cellular, other wireless, video and audio compression
technologies.
Theories of dysfunctionality
and abuse in patent licensing, with SEPs in particular, predict that alleged hold-up
and royalty stacking will affect and harm markets and consumers in various ways
by reducing R&D, slowing innovation, extracting excessive aggregate royalty
payments, stagnating consumer prices, impeding or foreclosing market entry and increasing
vertical integration.
I racked my brains to identify and measure all conceivable factors
driving good, bad and neutral effects in smartphones and cellular service
markets. However, in these “poster-child” markets for (F)RAND-based SEP
licensing evidence
shows opposite effects to those predicted above, at least since the introduction of 3G technologies 15 years ago and with mass-market smartphones and mobile broadband since around 2007. Everything seems very healthy
and, if anything, improving:
- Consumer adoption and
consumption increasing
- Innovation and
technical progress accelerating
- Cellular technology
R&D up 74% to $46bn since 2009
- Time-to-market for
new standards shortening
- Technology/device OEM
vertical integration collapsed
- Market entry
downstream in smartphones burgeoning
- Concentration in
handset OEM supply low and declining
- Smartphone prices
falling on average, and dramatically so, on a quality-adjusted basis
- Patent royalties are
a very small proportion of prices for consumer products and services
“Problems”, therefore, remain no more than unproven threats, after
all these years of market success…
Click
here
for my presentation deck with the supporting facts and figures.
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Posted By Blogger to
IP finance on 5/25/2015 01:30:00 a.m.