Enterprise Mobility - eWeek


Enterprise Mobility: Apple, RIM, Cisco, Samsung, HTC Could Fight Google for Nortel Patents

By Clint Boulton on 2011-05-10


Patent-poor Google has every right and cause to bid for Nortel's 6,000 enterprise networking, wireless, VOIP patent and patent applications. The search engine April 4 offered $900 million for the rights to the technology, an overture Nortel accepted as it seeks its way out of the financial quagmire of bankruptcy. Google doesn't make hardware and analysts told eWEEK Research In Motion, Apple, Nokia and others might make better use of Nortel's patent technology, which is used in RIM BlackBerrys and Apple's iPhone. However, Google does make the Android operating system used in smartphones made by Samsung, Motorola, HTC and others. The kicker is that Google's deal with Nortel is a stalking horse sale that could bring out other bidders to challenge Google for the patents. BusinessWeek.com reports that patent purchaser RPX is mulling its own bid for the assets, which would likely push the patent price to more than $1 billion. Peter Holden, a partner at Coller Capital, which reviewed Nortel'S portfolio, told the publication "whoever buys this has a very big nuclear weapon." In any event, bidders who want to participate in the Nortel patent auction June 20 must notify the company by June 13. If RXP secured the Nortel portfolio, we believe this would be a waste of fine technology that could be used to spice up competition in the mobile broadband market. This eWEEK slide show presents a list of possible rivals to Google's stalking horse bid for the Nortel patents.

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Research In Motion

On top of our list is Research In Motion, whose co-CEO Mike Lazaridis once called Nortel's patent war chest a "national treasure." RIM, which has been hemorrhaging smartphone market share to Google's Android platform and Apple's iPhone, is reportedly weighing whether to outbid Google for the Nortel patents.

Apple

Apple is certainly not patent poor, as evidenced by its recent infringement lawsuits versus Samsung, HTC, Nokia, etc. Again, Nortel's patents cover technology used in the iPhone, making Apple a perfect candidate to outbid Google. However, Apple CEO Steve Jobs is careful with the company's cash, so we ultimately think it will sit this one out.

Cisco

Cisco is no dark horse. Nortel's patents cover a lot of networking technology. Cisco just realigned with enterprise networking at its core. The math makes sense for Cisco to throw its hat into the Nortel patent ring.

Microsoft

Like Google, Microsoft doesn't make the actual phones, but it’s betting its mobile future on Windows Phone, its new mobile operating system. Thus far, Windows Phone hasn't made any inroads versus Apple iOS or Android. Outbidding Google for the patents with a cool $1 billion from its Office war chest would score a huge coup versus its search rival.

Nokia

Nokia is hardly patent poor, but it is a mobile phone maker that is struggling with its software identity so much that it had to partner with Microsoft to make Windows Phone its core platform. Grabbing the Nortel patents would be another way Nokia and Microsoft, by virtue of their partnership, can combat Android.

Motorola

While Motorola has been on the comeback trail after hitching its wagon to the comet that is Android, it has stumbled of late. The company reportedly issued the Motorola Xoom Android 3.0 "Honeycomb" tablet too early, resulting in weak sales and it erred by preannouncing its Motorola Droid Bionic 4G smartphone, only to push it back for a redesign. Plus, any wireless patents it can get to defend versus Apple, Microsoft and others is helpful.

Samsung

Like Motorola, Samsung is hungry to beat Apple's iPhone and other Android handset makers in the smartphone market. Grabbing the Nortel patents would be a serious boost to fortify Samsung in litigation with mobile market rivals.

HTC

HTC was the first big Android phone maker to be sued by Apple for its smartphone technology. Some wireless patents would clearly help the increasingly strong phone maker, whose HTC Droid Incredible, HTC Evo 4G and ThunderBolt are popular handsets.

Kyocera

Kyocera hasn't moved as aggressively as it could in adopting Android, but it could do better by going after the Nortel patents to help expand its Android smartphone line, which includes the Kyocera Echo dual-screen Android 2.2 handset in the United States.

Android Phone, Tablet Makers

Global Equities Research analyst Trip Chowdry offers this graph of patent poor companies that could use a shot in the arm to help defend against Apple, Microsoft, Nokia and other potential mobile market litigants.

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