Robert Cringely claims to have some details of the deals that were in place for the $4.5 billion acquisition of Nortel's patent portfolio. The patents were ultimately won by a consortium that included Apple. The auction drew interest of many of the major players in mobile today due to Nortel's large portfolio of Long Term Evolution (LTE, also known as "4G") related patents.
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Reuters recapped some of the behind the scenes maneuvering amongst the players. The bidding began with 5 different parties: Apple, Intel, Google, a consortium of Ericsson, RIM, Microsoft and EMC, and a consortium led by RPX. As the bidding increased, partnerships formed and Apple joined up with the Ericsson/RIM/Microsoft/EMC consortium. Meanwhile, Intel partnered with Google whose bidding "tapped out" over $4 billion. The patents were ultimately won for $4.5 billion.
Cringely claims that within the consortium were different arrangements for each party. RIM and Ericsson reportedly put up $1.1 billion together and includes "fully paid up" license rights to the portfolio. Microsoft and Sony also put up another $1 billion with unspecified terms, while EMC contributed $400 million for a subset of patents.
Meanwhile, the largest contributor of the consortium was said to be Apple who put up $2 billion "for outright ownership of Nortel's Long Term Evolution (4G) patents as well as another package of patents supposedly intended to hobble Android." Apple obviously has a large interest in LTE/4G for future iPhones and iPads. Apple recently settled with Nokia and agreed to a license of their patents for use in Apple's mobile devices. Nokia is also said to have a significant number of LTE related patents. Ownership of such patents could give Apple leverage and/or provide licensing fees from other mobile manufacturers that offer LTE technology.
Top Rated Comments
Samsung, etc, wouldn't know what to do. There'd be nothing to copy.
Four years ago it entered what was called the upper part of the phone market with aspirations of capturing 5%. They had no patents relating to phones per sec. just some UI patents.
Within that first year Apple became the phone to own, and they were only on one network in one country. Now, Apple is greater then 5% worldwide, and a third of the USA market for smart phones. The iPhone 4 and 3GS are the number one and two selling phones, and now Apple owns a portfolio of important communications patents other manufacturers would love to have.
I cannot think of a similar market that has been so rapidly transformed by a new player as the smart phone market. Maybe the tablet market, but nothing else comes to mind.
Jailbreaking also unrestircts apples walls which makes iOS actually usable.... but android is just as hampered. phones are still being released with fryo when there has already been two other versions of android released and ice cream announced.
That would be a terrible business decision. All of their competitors were bidding on them for the same reasons, would have been stupid to pass on trying to obtain these patents.
Not Apple's style to do that. This strikes me as a defensive purchase. This is how it would go:
Competitor: "Aha! Pay up, Apple. We own these patents that cover the iPhone!"
Apple: "Don't think so. We own the LTE patents. Nice LTE phone you have there, shame if anything were to happen to it."
Competitor: "Never mind."
Samsung makes cheap crap. The vibrant was the worst phone ever. Al they do is copy apple and then make a POS.