There isn’t a single company or manufacturer solely responsible for producing your favorite tech gadgets. A smartphone might feature a display made by one company, a chip fabricated by another, and camera sensors assembled by a third. Many companies contribute to the manufacturing process for tech products like phones, tablets, and laptops. Every brand in the chain needs to get paid for their work, which is why the final sticker price for modern gizmos is extremely high. If you buy a Samsung phone, you’re not just lining Samsung’s pockets — the revenue is passed onto countless partners.

Brands matter in the technology industry, and often, you’re paying for the brand name on the box. To include certain features, licenses, or certifications, manufacturers need to pay fees and royalties to other companies. That drives up the total price of the gadget you want to buy. If you’re wondering why your latest phone or laptop is exorbitantly priced, these companies and their pricing structures could a small part of the reason.

HDMI

HDMI LA charges a fee for each HDMI port

Most consumers never realize it, but ports and the communication protocols they depend on usually aren’t free. Display connectivity options like HDMI and DisplayPort both come with licensing costs. If you see a certified DisplayPort or HDMI port on your laptop, PC, or TV, you can be sure the manufacturer of your product paid for it. However, these licensing fees aren’t equal. DisplayPort only charges a flat licensing rate for each device that uses the standard, so including one DisplayPort port costs the same as including 10.

HDMI doesn’t work the same way. The HDMI Licensing Administrator (HDMI LA) charges brands a hefty yearly royalty fee or a per-port fee to include HDMI ports on their devices. A company selling a TV or AV receiver with four HDMI ports would have to pay royalties four times or the large annual stipend. This discrepancy explains why you might see more DisplayPort ports on a device than HDMI ports — and why devices with a bunch of HDMI ports may come with premium prices.

Dolby

Dolby Vision and Dolby Atmos support requires pricey licenses

If you see the Dolby logo on a product or service, know that a company paid for it. Currently, the Dolby Vision and Dolby Atmos video and audio formats are all the rave, and they cost money to include on products. Dolby sells certifications to hardware manufacturers for formats like Vision and Atmos. In return, Dolby validates the performance and compatibility of these devices, ensuring they meet the Dolby Vision and/or Dolby Atmos specifications. That way, when a customer sees the Dolby Atmos or Vision brand on a box, they know exactly what they’re going to get.

These certification and licensing costs are accounted for in a product’s pricing. While many companies pay Dolby for the certifications and brand usage, others don’t. There are free alternatives that provide similar experiences. For example, while Motorola pays for Dolby Vision support on its flagship Android phones, Samsung uses the free HDR10+ standard instead. It’s a dillema for brands, because the Dolby logo might help them sell more devices, but it also raises the cost to make them.

Qualcomm

Percentage-based royalties ensure Qualcomm gets its cut

Qualcomm makes excellent Arm processors and even better 5G modems, with chips like the Snapdragon 8 Elite Gen 5 and modems like the Qualcomm X105 representing some of the best the industry has to offer. This puts Qualcomm in a prime negotiating position — if you want to make a great 5G-equipped device, you might need Qualcomm chips, modems, or patents. Qualcomm typically requires manufacturers to license essential cellular patents before selling them chipsets. Some criticize the policy, but both U.S. and U.K. courts have rejected antitrust challenges against it, according to Reuters.

The company’s 5G Handset Licensing Program charges manufacturers a royalty rate of 3.25% of the net selling price of devices that use Qualcomm’s cellular standard-essential patents, as explained by multiple Qualcomm documents. These programs also include a per-deivce cap. As an example, the royalty fee for a $100 smartphone would be $3.25. A smartphone priced at $200 would need to pay a $6.50 fee if it uses these standard-essential patents. That’s in addition to the cost of any Qualcomm chips used in the product.

Between the patents and chip costs, Qualcomm components are an expensive part of devices that use the company’s technologies. These are inevitably passed onto consumers at the final point of sale.

If you make the best tech, you can charge what you want for it

I don’t think tech companies should be forced to give away their best innovations. That’s one reason why Apple’s walled-garden ecosystem doesn’t bother me. Apple built its products and services from nothing, and shouldn’t be required to make them work with third-party platforms. To that end, I also think tech companies have a right to charge what they want for their products, services, and brand. HDMI, Dolby, and Qualcomm aren’t forcing anyone to use their technology — companies pay the fees and royalties because they think the value proposition makes sense, and their customers want the technology.

So, when you see HDMI, Dolby, or Qualcomm logos or components on a product, you can be sure these inclusions came at a cost. As with any cost, these are eventually passed on to the consumer. It’s up to you to decide whether the licensing fees and royalty structures make these three companies “greedy.” After all, they’re not the only companies earning from similar revenue streams, and your favorite gadgets wouldn’t be the same without them.