No I am not working backwards. 3C, 6C, Dolby and quite some others
are collecting patent fees. The license fee is only applicable
for exported DVD player and effectively kill all the local brands for
the export market. And the margin for the Chinese exporters is
always very low. The company used to sell DVDs at US$50 in Walmarts
is called APEX. It basically cheated lots of Chinese vendors. I think
there are very few Chinese brand DVD player in the States now.

http://www.chinadaily.com.cn/english/doc/2005-01/20/content_410667.htm
http://www.nytimes.com/2004/12/28/business/worldbusiness/28tele.html?ex=1261976400&en=752b208676513a4d&ei=5088&partner=rssnyt

And you are right that majority of the DVD license fee will still be
applicable to EVD players or other players which have to be
compatible with DVDs. Even lots of the core TD-SCDMA IPs are not
owned by the Chinese vendor who developed it. However to hold at
lease some core IPs will benefit the vendors when negotiating.

It seems to me that Huawei Technology and ZTE technology is doing quite
well in the 2.5G/3G market in some countries outside China. China
has yet to decide the 3G format but the major operators will probably
choose W-CDMA and CDMA-2000.

Regards,
Xiaofan

On 10/8/05, William Chops Westfield  wrote:
> On Oct 7, 2005, at 8:01 PM, Xiaofan Chen wrote:
>
> > Patent fees levied on Chinese DVD player manufacturers has reached as
> > high as US$27.45 per unit according to a report, effectively more
> > than 40% of a US$60 DVD player pirce.
>
> Did you work backward from the 40% number and $60 retail price to get
> that license fee?  (obviously not exactly, I guess.)  Typically the
> manufacturing cost of a consumer device has to be down around 40%
> of retail just in order to allow each level of distribution to get
> their cut (maybe somewhat higher for mass-market stuff.)  If the license
> fees are really $27.45, that would mean the remaining parts cost for a
> $60 dvd player would have to be less than zero.
>
> That would certainly explain why there's such a resistance to the
> "standards based" formats!
>
> I'm not sure that it'd be possible to create a competing format without
> infringing on an equal number of patents, but at least you wouldn't be
> admitting ahead of time that you knew you were going to be using that
> patented technology.
>
> BillW

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