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Apple Contributing $2.6 Billion Toward Nortel Patent Purchase

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MacRumors

macrumors bot
Original poster
Apr 12, 2001
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Earlier this month, an Apple-led consortium beat out Google in an auction of thousands of patents from bankrupt Nortel, bidding $4.5 billion for the entire package of patents. As noted by @SammyWalrusIV (via Business Insider), Apple 10-Q quarterly report filed with the U.S. Securities and Exchange Commission revealed that Apple's contribution to that effort totaled $2.6 billion.
On June 27, 2011, the Company, as part of a consortium, participated in the acquisition of Nortel's patent portfolio for an overall purchase price of $4.5 billion, of which the Company's contribution will be approximately $2.6 billion. This asset acquisition is subject to approval by various regulatory agencies.
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Apple's partners in the deal included EMC, Ericsson, Microsoft, Research in Motion, and Sony. Apple's $2.6 billion contribution represents 58% of the entire purchase price of the Nortel patent portfolio. The large number may add credence to the rumor to have paid $2 billion for "outright ownership" of Nortel's LTE (4G) patent technology.

And Apple may not be finished with its efforts to purchase intellectual property on the open market, as the company is said to be considering going up against Google again for a portfolio of 1,300 patents related to mobile phone technologies being offered by InterDigital.

Article Link: Apple Contributing $2.6 Billion Toward Nortel Patent Purchase
 
Article Link
https://www.macrumors.com/2011/07/21/apple-contributing-2-6-billion-toward-nortel-patent-purchase/
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nwcs

nwcs

macrumors 68030
Sep 21, 2009
2,722
5,262
Tennessee
nanotlj said:
why not just buy nokia instead if apple need that much of the related IP?
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They don't want them. And Microsoft is already in bed with them. I predict the justice department will interfere with the InterDigital IP purchase. They won't want Apple controlling a majority/significant portion of 4G IP. But you never know.
 
H

Henriok

macrumors regular
Feb 19, 2002
226
14
Gothenburg, Sweden
nanotlj said:
why not just buy nokia instead if apple need that much of the related IP?
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Buying a dead company is one thing, buying a dying one is another matter completely. Keeping Nokia alive, or putting them down would cost very much more than what the initial price tag say and in Nokias case, that would be a tremendous amount.
According to Nokia's quarterly report Apple payed them $430 million to settle the ongoing battle.
 
*LTD*

*LTD*

macrumors G4
Feb 5, 2009
10,703
1
Canada
nanotlj said:
why not just buy nokia instead if apple need that much of the related IP?
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Because the rest of Nokia is a waste.

And a company that doesn't want to be bought also causes difficulties for the prospective buyer.

Purchases and spending need to be accounted for, even if it doesn't seem like a lot of money
 
Popeye206

Popeye206

macrumors 68040
Sep 6, 2007
3,148
836
NE PA USA
Talked with a local high-tech patent lawyer the other night at a local event and he thinks what we're seeing is a shake out in the high-tech patents. His feeling is the method has become "implement someones IP" and then see if they try and protect it. Then hope in court you can dilute or dismiss their claims or obtain a reasonable cross license.

It does seem that protecting your IP and keeping others from implementing it is almost impossible these days. It will be interesting to see what happens.
 
Rocketman

Rocketman

macrumors 603
Dec 2, 2001
6,191
1,186
Claremont, The intellectual capitol of the world.
Kodak is also floating their patent portfolio. Sounds like a way to monetize them while retaining use of them and losing the unpredictable expense of litigating them. I wonder if Apple has enough money from THIS month's net to pay for them, cash. :D

BTW the more recent 10-Q is out which further details their self-financing and expansion efforts. Their entire new HQ project is covered by 1/8 of one fiscal quarter net income after taxes.

They pay over $2.5B per quarter in federal income taxes.

Rocketman

http://investor.apple.com/common/do...8c7c2b2&filename=AAPL Q3FY11 10Q 07.20.11.pdf

June 25, 2011 September 25, 2010
Cash, cash equivalents and marketable securities $ 76,156 $ 51,011
Accounts receivable, net $ 6,102 $ 5,510
Inventory $ 889 $ 1,051
Working capital $ 20,039 $ 20,956

Burn rate?
Cost of sales 16,649
figures in millions
 
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T

TMay

macrumors 68000
Dec 24, 2001
1,520
1
Carson City, NV
Battle of business models

Apple's walled garden and the licensing approach of MS and HP are IP friendly OS's whereas Google's Android OS almost requires poaching IP to keep overhead down and undercut Apple and the other players on price.

Some of these manufacturers have enough IP of their own so that they can negotiate moderate licensing terms, but the current reality is that only a single Android handset manufacturer, HTC, is even generating income from Android handsets.

The additional burden of IP licensing may force some of the current Android manufacturers to switch allegiance to the license model of MS or HP. This would be a blow to Google in its quest to attain some level of OS level control of a hardware platform and hence mobile advertising.

My personal thoughts are that Android as a competitive OS platform may have already seen its peak, and that over the next couple of years, MS and HP will win back market share primarily from Android.

This would leave Google's Chrome OS which must battle with MS's Window's platform and products which is well entrenched.

For Google, there's always Facebook to battle and Bing to fend off.
 
arcite

arcite

macrumors 6502a
Sep 6, 2009
889
518
Cairo, trapped in a pyramid with my iphone
Rocketman said:
Kodak is also floating their patent portfolio. Sounds like a way to monetize them while retaining use of them and losing the unpredictable expense of litigating them. I wonder if Apple has enough money from THIS month's net to pay for them, cash. :D

BTW the more recent 10-Q is out which further details their self-financing and expansion efforts. Their entire new HQ project is covered by 1/8 of one fiscal quarter net income after taxes.

They pay over $2.5B per quarter in federal income taxes.

Rocketman

http://investor.apple.com/common/do...8c7c2b2&filename=AAPL Q3FY11 10Q 07.20.11.pdf

June 25, 2011 September 25, 2010
Cash, cash equivalents and marketable securities $ 76,156 $ 51,011
Accounts receivable, net $ 6,102 $ 5,510
Inventory $ 889 $ 1,051
Working capital $ 20,039 $ 20,956

Burn rate?
Cost of sales 16,649
figures in millions
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Gotta love it how in 10 short years Apple has become the 10,000 ton Gorilla of the tech world. :eek: :D
 
*LTD*

*LTD*

macrumors G4
Feb 5, 2009
10,703
1
Canada
arcite said:
Gotta love it how in 10 short years Apple has become the 10,000 ton Gorilla of the tech world. :eek: :D
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It's all about Apple's approach to tech.

User Experience is job #1. Everything else be damned (even if it ends up costing you.)
 
D

Durendal

macrumors 6502
Apr 12, 2003
287
1
macsmurf said:
...or they could use the innovations these patents represent to make better product - but they probably won't.
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Quoted for truth. Patents are NOT about innovation anymore, people. They're about legalized extortion. When the patent system lets you patent anything and everything, and then lets you sue everyone under the sun with it, we have a problem. Software patents should NEVER have been allowed. But now we have many, many companies, Apple included, using these patents, most of them utterly obvious and/or only SLIGHTLY different than something else, suing each other for licensing fees. There are also the patent trolls sucking up money too. Nobody wins but the lawyers. Consumers lose especially hard.

So thank you, Apple, for doing your part to abuse the already broken system. We really appreciate it. Ugh.
 
GLS

GLS

macrumors 6502a
Jun 26, 2010
561
600
Durendal said:
So thank you, Apple, for doing your part to abuse the already broken system. We really appreciate it. Ugh.
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So what was Apple's alternative? To allow Google to get the patents, and do their part to abuse the already broken system?
 
E

ed724

macrumors regular
Aug 1, 2009
227
1
Durendal said:
Quoted for truth. Patents are NOT about innovation anymore, people. They're about legalized extortion. When the patent system lets you patent anything and everything, and then lets you sue everyone under the sun with it, we have a problem. Software patents should NEVER have been allowed. But now we have many, many companies, Apple included, using these patents, most of them utterly obvious and/or only SLIGHTLY different than something else, suing each other for licensing fees. There are also the patent trolls sucking up money too. Nobody wins but the lawyers. Consumers lose especially hard.

So thank you, Apple, for doing your part to abuse the already broken system. We really appreciate it. Ugh.
Click to expand...

So you see how we live in a litigious society. However I believe patents do have their place.
 
Rocketman

Rocketman

macrumors 603
Dec 2, 2001
6,191
1,186
Claremont, The intellectual capitol of the world.
*LTD* said:
It's all about Apple's approach to tech.

User Experience is job #1. Everything else be damned (even if it ends up costing you.)
Click to expand...
I think you are right and as for judging that, I consider it a Good Thing-tm.

It certainly is a good thing for product uptake, consumer experience, and buzz.

It may not generate the most advanced hardware specs or device speed or network capabilities, but what if all those users were allowed to be tethered, view HD on mobile and generally blow through bandwidth?

Nobody would be able to reliably connect and do the basics.

If Apple does get a large number of 4G patents, they will be in a position to license them with caviats, such as inter-network compatibility and such. IF the government will let them without anti-trust issues. Apple wants to sell devices and have them do spectacular things on networks. They don't particularly care how profitable the networks are, just that they have a manageable manufacturing capability to address all of them. It's bad enough China and USA (TD-LTE) have different standards for 4G-LTE, with China widely recognized as the better standard (FT-LTE).

I am waiting for the day in 3-4 quarters when international sales account for over 85% of Apple sales. It is already about 62%!

I just want a data only phone that can access at least two different networks depending on where I am at the moment. I am willing to do VoIP for calls.

Rocketman
 
D

Durendal

macrumors 6502
Apr 12, 2003
287
1
ed724 said:
So you see how we live in a litigious society. However I believe patents do have their place.
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They do, but at the very least, they need to be limited to physical ideas, not software. The legal definition of prior art also needs to be greatly expanded.
 
GLS

GLS

macrumors 6502a
Jun 26, 2010
561
600
Durendal said:
Google has done less to abuse the system than Apple.
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And Google has far fewer patents than Apple.

You really think that Google, if given the opportunity, would NOT behave the same way Apple does in regards to IP and patents?
 
J

jaison13

macrumors 6502
Jun 20, 2003
253
7
pittsburgh
Durendal said:
Google has done less to abuse the system than Apple.
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really?? let's see. first they stole from yahoo to build a search engine, then they stole from apple create android and now they are stealing from facebook to make google plus. has google come up with one uniquely original idea in their entire existence? they simply stand on the shoulders of giants and add a tweek or two.google is the modern day microsoft. steal and license to anybody. just like there are plenty of inferior computers running windows there are a ton of cheap phones using android. i know they never would but IF apple licensed osx or ios there would be a ton of different, cheaply made mac clones and iphone clones. i'm very happy apple keeps it's software and hardware under it's banner only. i've never been disappointed when i by apple hardware or software. it all just works and works well!!

i love hearing schmidt, who was on apple's board say things like apple should innovate instead of suing. when was the last, or make it the first time google innovated anything???
 
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