InterDigital has announced that Google signed a new licence agreement for Pixel smartphones, Fitbit wearables and other consumer electronics devices. The licence covers InterDigital’s cellular wireless, Wi-Fi and HEVC portfolios.
The pair struck the deal in private negotiations without the need for litigation. Similarly, in 2022, InterDigital announced a litigation-free renewal with Apple for $134 million annually for seven years. That deal announcement did not say whether it covered the same three portfolios in the Google licence. Nor did the parties disclose whether iPhones and other Apple devices were included.
In a statement, InterDigital Chief Licensing Officer Eeva Hakoranta commented: “This agreement with Google is another sign of the importance of our technologies to a range of consumer devices. It also strengthens our belief that, from smartphones, to wearables, and the Internet of Things, our innovation is only becoming more important in an increasingly connected world.”
No one from Google’s press team responded to a request for comment before deadline.
Google is not among the world’s largest smartphone sellers. News reports indicate it sold 2 million chipsets in Pixel smartphones in the first quarter of 2024. If so, it commands less than 1% of the market.
Counterpoint Research reports that in 2024’s first quarter – which counted 269.9 million units, a 6% year-over-year increase – the top five sellers were:
- Samsung – 20% or 59.4 million units
- Apple – 17% or 50.6 million units
- Xiaomi – 14% or 41.6 million units
- OPPO – 8% or 25.1 million units
- Vivo – 7% or 21.6 million units
Other smartphone makers accounted for 34% of the market, or 87.8 million units.
Writing on LinkedIn, Avvika AB Managing Director Eric Stasik calculated that InterDigital’s average royalty per unit in 2023 was $0.48. This was based on the firm’s $549.6 million annual revenue in 2023 and that year’s 1,140 smartphone shipments.
“It’s very simple. I pull down the reported licensing revenues from annual reports and normalize to the dollar using the exchange rates from the annual reports. And then I divide this number by the number of smartphone units sold during the same year (more or less.) This gives me an average royalty per unit,” he writes. “I know this does not provide an accurate picture – it is not correct to attribute all licensing income to royalties received from smartphone licensees. But it is fast and easy and revealing.”
Stasik’s analysis said InterDigital’s royalty revenues had increased since 2022, unlike other major SEP licensors – Ericsson, Nokia and Qualcomm – who have seen falling earnings. The way he put it: “InterDigital might be the smallest of these four, but they are the only ones posed for growth.”
Other pending deals
We know that InterDigital’s patent licence with Huawei expired at the end of 2023 and caused a year-on-year decline in recurring revenue in 2024 Q1.
Also, sometime this summer Samsung and InterDigital will have a hearing in their arbitration to agree to pricing terms for their cellular wireless portfolio renewal. Previously, the InterDigital-Samsung licence was valued at $80 million per year, but CFO Rich Brezski told analysts at the company’s most recent earnings call that the value will increase because of 5G technology. Yet as they continued discussions over the cellular licence, Samsung nevertheless signed a pact for smart TVs to obtain a licence to InterDigital’s Wi-Fi, video codec and ATSC 3.0 patents.
The company also has pending cases against Lenovo – it secured a German injunction in May – and OPPO, which pulled out of the German market this year because InterDigital won an injunction.