How Much 5G is Needed in Cars? 

How Much 5G is Needed in Cars?

March 23, 2021

The automotive industry is experiencing a similar transition to the mobile phone industry, where profits are being redistributed among companies due to changes in business models, platforms, and market participants. Currently, automotive connectivity is mostly used for features like automatic emergency calls, enhancing smartphone signals, telematics, and navigation. However, connectivity will soon be used for dynamic traffic management, intelligent parking, and infrastructure to support the integration of autonomous vehicles into road traffic. Although fully autonomous vehicles will evolve over time, manufacturers are already implementing autonomous functions like speed control and lane departure warnings.

The auto industry may heavily rely on 5G technology soon, leading to royalty payments due to the vast number of essential 5G patents. Unlike the communication industry, where licensing fees can reach hundreds of millions, auto industry licensing practices differ. Original Equipment Manufacturers (OEMs) usually don’t pay royalties to tier 1 suppliers. Licensing negotiations typically revolve around specific patented components. These patents, though not essential, haven’t significantly affected vehicle prices as alternatives are possible. However, for SEPs, there’s no choice if an automaker wants to adopt a standard like 3G, 4G, or 5G. In recent years, SEP owners have primarily targeted OEMs, avoiding lower-value chain parts.

One question that hasn’t been addressed publicly is how much 4G or 5G capability is necessary in a car. Will the implementation of these standards in vehicles be significantly different from their use in smartphones, and if so, will SEPs be less involved?

Analysis conducted by LexisNexis IPlytics and ResearchWire shows that out of the 50 most patented 4G and 5G technical standards, only around 80% need to be integrated in currently built-in automotive connectivity boxes, and not all declared SEPs will be relevant for each standard implementation and therefore also royalties must consider these differences. The report provides further details.

Read the Report

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