Mobile phone makers like Nokia and Motorola pay significant royalties to Qualcomm

Qualcomm is the developer of a type of mobile phone communication technology called Code Division Multiple Access (CDMA).  About 44% of mobile phones in the world use CDMA, up from 22% in 2005.

Qualcomm makes money from mobile phone makers that use its CDMA technology.  Mobile phone makers like Nokia and Motorola pay Qualcomm a royalty rate of about 4% of the selling price of each mobile phone sold with Qualcomm’s CDMA technology.  This royalty rate has declined from over 4.7% in 2005 and we forecast that it will be 3.3% by the end of the Trefis forecast period.  We estimate that mobile phone royalties constitutes about 33% of Qualcomm’s stock price.

Within Qualcomm’s content on our platform, you can see how the CDMA Mobile Phones Royalty Rate impacts Qualcomm’s stock price.  The Trefis estimate for Qualcomm’s stock is $45.52 compared to a market price of $46.21 as of the close on Friday.