How much extra money to consumers pay for phones thanks to royalty fees?

A working paper on smartphone royalties has calculated from a “bottom up” analysis that the potential patent royalties on a hypothetical $400 smartphone could be over $120. This is more than the cost of the components. The authors say that the cost of the royalty stack “may be undermining industry profitability and, in turn, diminishing incentives to invest and compete”. This is the opposite of what patent royalties are supposed to do. The Smartphone Royalty Stack is a 69-page paper that goes through all the elements of a smartphone, and adds up the potential payments based on the rapidly-increasing number of patent lawsuits. Because the smartphone is a converged device, this doesn’t just include royalties on obvious mobile technologies, such as baseband or LTE. It also includes royalties on file formats such as JPEG, MP4, and AAC; Wi-Fi, Bluetooth, and GPS; RAM and SD memory cards; DLNA and NFC, and the operating system.