Google knew Apple really wanted these patents, so their "odd" bidding was their way of showing they weren't really serious. They just worked to artificially inflate the price, then dropped out when it looked like they were reaching the end of where Apple and the others would go.
The result was a sale price that was four times the expected amount. Apple may have bought some important patents, but they paid far more than they should have. And I've got fifty bucks that says they don't go after anyone with these, and if they do, they won't win. The US patent system is broken.
Wrong... RIMM alone chipped in 770 Mil. and Ericson chipped in 340 Mil.
That leaves EMC, Sony, Microsoft and Apple.
Apple at most probably paid 2 Bills or less with the others paying half a Mil or more give or take a couple of Mils here and there.
This is an awesome deal for Apple.
Apple can greatly improve upon these technologies over the years while collecting the most royalties.
The patents are also great for defending against the likes of Motorola and Nokia.
Apple is now a telecom powerhouse with the devices to use that power.
We'll probably see more of these unlikely partnerships as it's increasingly becoming "everyone vs Google" in the tech world. Who would have thought you'd see Apple, Microsoft, Sony and RIM working together? If the common goal is to stop the advancement of the 800lb gorilla in the room, allegiances like this will be common.
$4.5bn is a stupid amount of money. What was in those patents?
A big chunk of 4G for starters. I think the global handset market is something like 1billion units per year - it doesn't look that insane.
My back of the envelope calculation is that for 20 years of patent with a market of 1billion devices per annum these licenses would only need to generate 30cents per device to cover the cost. I'm actually surprised it didn't go higher.
I'm sure Google/Intel were planning to offer small handset makers cheaper licensing terms if they went with their OS & chipsets.
As for the Apple-Intel relationship, I don't think it's as bad for Intel as you're painting it. Apple's custom chips are going to continue to dominate in their mobile offerings - and could conceivably end up in the Air - but it's really really hard to see them hitting the MB or MBP lines any time soon. Intel has the worlds best Fabs and that will continue to keep its offering in the Laptop and Desktop space compelling.
Intel and Apple's "toxic" relationship is so overdramatized here. Just because Apple decided to use ARM based chips for the iOS devices and not Intel chips doesn't mean the companies don't have a good relationship. Just look to Thunderbolt as proof that Apple and Intel are still working together for common goals.
Stupid money means more money has to be paid by stupid people.
That of course being us the public.
It is bad news that patents are becoming 'family silver' to be sold off to the highest bidder.
It depends. If you are one of the people that lent about 14 billion (or more, depending on what the claims end up to be) to Nortel, you might not think it so stupid that you can get some of your money back from the auction, through companies that can easily afford it (and companies that can make the best use of the patents).
I like to know more about the sub plot where Intel first dropped out then changed sides from the winning Apple consortium to the eventually losing Google one. How weird is that? Were they doing a 'Schmidt the Mole' act from the beginning and always planning to swap and tell Google the thinking on the other side?
Look at the Rockstar line up, most of the companies involved would benefit from making the LTE patents widely available at a low cost. I see this purchase as a way to make sure that the handheld products of the future have the low cost bandwidth they need.
Quote:
How will Intel being on the losing side play out in the future Apple - Intel relations or are they already in the pan as Apple develops its A chips?
Intel knows damn well its chips are not usable in Apples handheld devices. As to Apples other products it is a matter of competition between Intel and AMD, ARM isn't even in the picture.
Quote:
So many questions .... The biggest question maybe how will this change Android's future?
Anybody with any sense would stay away from Android and that really has nothing to do with this auction. One should just be happy that Google, an advertising and spy ware company, didn't get a hold of important LTE patents. Could you imagine, every LTE connection you make would force feed you a Google ad.
I'm not saying Rockstar will not do something stupid just that we are almost guaranteed a far different networking world if Google held the patents.
Where are you getting that Intel was ever part of the Apple consortium? My reading of the article is that they went from being an independent bidder to talking to both sides.
I must have been dreaming ... I could have sworn I read they were on the same team in previous articles. My bad.
Could you imagine, every LTE connection you make would force feed you a Google ad.
Danm... I never thought of that one.
But I did however imagine this auction taking place on eBay with the emails coming in, "You have been outbidded, Please bid a few millions more."
The winner then uses PayPal to pay 4.5 Billion plus taxes and shipping fees to the seller.
Then the patents (boxes and boxes of paper) are delivered by US mail.
Then the buyer goes WTF, that's not what the auction advertised, I want a full refund.
Then PayPal says, "Well, we can give you $200 refund. You'll have to get the rest in court. Good Luck to ya getting your money back from a foreign country."
I'm not saying Rockstar will not do something stupid just that we are almost guaranteed a far different networking world if Google held the patents.
That's probably very true. On an side bar re Google's moves to be even more aggressive, I notice the free APIs for placing Google maps in web sites are now updated to allow advertising, even competitors to the web site they are on unless you pay the big bucks. The MLS systems must be having a deep think! Personally I switched to http://wikimapia.org
But I did however imagine this auction taking place on eBay with the emails coming in, "You have been out bided, Please bid a few millions more."
The winner then uses PayPal to pay 4.5 Billion plus taxes and shipping fees to the seller.
Then the patents (boxes and boxes of paper) are delivered by US mail.
Then the buyer goes WTF, that's not what the auction advertised, I want a full refund.
Then PayPal says, "Well, we can give you $200 refund. You'll have to get the rest in court. Good Luck to ya getting your money back from a foreign country."
I used to play a bit of poker online for money. I don't anymore, because it's now totally illegal, and a small amount of my poker money is still tied up online, thanks to the FBI.
Let's set some facts straight....
Playing online poker is NOT illegal. Playing online poker is NOT illegal even in the Unites States.
What is illegal in the Unites States is the transfer of money between US financial institutions and online gambling businesses.
Therefore, you can play online poker all you want in the United States. You simply can't get your money in and out of there via a US financial institution.
PS: I play a lot of online poker. Even today. And from the US.
This is great that Apple owns the LTE patents. I hope the A-team rips Samsung a new A-hole. I hope Google gets hit with a huge anti-trust lawsuit. Then I hope Apple releases a Liquidmetal battery and puts every other computer maker out of their misery.
The story everyone seems to be missing here is who gets what in this consortium deal? Most journalists and bloggers seem to assume the winners will all share equally in the IP spoils. But I have people who know people and the word I am hearing it that?s not the way the consortium works at all.
Some consortium members get patents, some get royalties, and some just get freedom from having to pay royalties.
Notice Nokia isn?t in the consortium? The Finnish company is apparently covered by Microsoft, tying Nokia even more firmly to Windows Phone.
Here?s the consortium participation as I understand it. RIM and Ericsson together put up $1.1 billion with Ericsson getting a fully paid-up license to the portfolio while RIM, as a Canadian company like Nortel, gets a paid-up license plus possibly some carry forward operating losses from Nortel, which has plenty of such losses to spare. For RIM the deal might actually have a net zero cost after tax savings, which the Canadian business press hasn?t yet figured out.
Microsoft and Sony put up another $1 billion.
There is a reportedly a side deal for about $400 million with EMC that has the storage company walking with sole ownership of an unspecified subset of the Nortel patents.
Finally Apple 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.
At the end of the day this deal isn?t about royalties. It is about trying to kill Android.
Google is a wolf that wears sheeps clothing in public. It is perhaps one of the most evil companies in existence right now. Why? Because of their total disregard for the privacy of the individual.
Have you a few examples of this total disregard for individual privacy? There must be many obvious ones since you state it as fact.
Yes, but there are different patents for accomplishing the same task, although differently. Further, you are assuming Apple isn't already paying licensing fees for some of the Nortel patents. If it is paying said licensing fees, it will no longer be paying them.
Quote:
Originally Posted by mcarling
You're both making the same error. Either an Apple product reads against someone else's patent or it doesn't. If it does, acquiring a different patent doesn't give Apple any freedom to produce the product (but it might help negotiate a cross-licensing deal). If it doesn't, then Apple didn't need to pay license fees in the first place. There are no parallel patents for a particular way of doing something, though there may be overlapping patents.
All serious academic work on auction theory is based on game theory.
The story everyone seems to be missing here is who gets what in this consortium deal? Most journalists and bloggers seem to assume the winners will all share equally in the IP spoils. But I have people who know people and the word I am hearing it that?s not the way the consortium works at all.
Some consortium members get patents, some get royalties, and some just get freedom from having to pay royalties.
Notice Nokia isn?t in the consortium? The Finnish company is apparently covered by Microsoft, tying Nokia even more firmly to Windows Phone.
Here?s the consortium participation as I understand it. RIM and Ericsson together put up $1.1 billion with Ericsson getting a fully paid-up license to the portfolio while RIM, as a Canadian company like Nortel, gets a paid-up license plus possibly some carry forward operating losses from Nortel, which has plenty of such losses to spare. For RIM the deal might actually have a net zero cost after tax savings, which the Canadian business press hasn?t yet figured out.
Microsoft and Sony put up another $1 billion.
There is a reportedly a side deal for about $400 million with EMC that has the storage company walking with sole ownership of an unspecified subset of the Nortel patents.
Finally Apple 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.
At the end of the day this deal isn?t about royalties. It is about trying to kill Android.
-Cringely
Wow, if this turns out to be true, then my earlier guess posted above was right on the money!
I predict that Apple engineers will do wonders with the LTE patents to the benefit of the world.
Comments
Google knew Apple really wanted these patents, so their "odd" bidding was their way of showing they weren't really serious. They just worked to artificially inflate the price, then dropped out when it looked like they were reaching the end of where Apple and the others would go.
The result was a sale price that was four times the expected amount. Apple may have bought some important patents, but they paid far more than they should have. And I've got fifty bucks that says they don't go after anyone with these, and if they do, they won't win. The US patent system is broken.
Wrong... RIMM alone chipped in 770 Mil. and Ericson chipped in 340 Mil.
That leaves EMC, Sony, Microsoft and Apple.
Apple at most probably paid 2 Bills or less with the others paying half a Mil or more give or take a couple of Mils here and there.
Apple can greatly improve upon these technologies over the years while collecting the most royalties.
The patents are also great for defending against the likes of Motorola and Nokia.
Apple is now a telecom powerhouse with the devices to use that power.
Time will tell.
$4.5bn is a stupid amount of money. What was in those patents?
A big chunk of 4G for starters. I think the global handset market is something like 1billion units per year - it doesn't look that insane.
My back of the envelope calculation is that for 20 years of patent with a market of 1billion devices per annum these licenses would only need to generate 30cents per device to cover the cost. I'm actually surprised it didn't go higher.
I'm sure Google/Intel were planning to offer small handset makers cheaper licensing terms if they went with their OS & chipsets.
As for the Apple-Intel relationship, I don't think it's as bad for Intel as you're painting it. Apple's custom chips are going to continue to dominate in their mobile offerings - and could conceivably end up in the Air - but it's really really hard to see them hitting the MB or MBP lines any time soon. Intel has the worlds best Fabs and that will continue to keep its offering in the Laptop and Desktop space compelling.
Intel and Apple's "toxic" relationship is so overdramatized here. Just because Apple decided to use ARM based chips for the iOS devices and not Intel chips doesn't mean the companies don't have a good relationship. Just look to Thunderbolt as proof that Apple and Intel are still working together for common goals.
Stupid money means more money has to be paid by stupid people.
That of course being us the public.
It is bad news that patents are becoming 'family silver' to be sold off to the highest bidder.
It depends. If you are one of the people that lent about 14 billion (or more, depending on what the claims end up to be) to Nortel, you might not think it so stupid that you can get some of your money back from the auction, through companies that can easily afford it (and companies that can make the best use of the patents).
I like to know more about the sub plot where Intel first dropped out then changed sides from the winning Apple consortium to the eventually losing Google one. How weird is that? Were they doing a 'Schmidt the Mole' act from the beginning and always planning to swap and tell Google the thinking on the other side?
Look at the Rockstar line up, most of the companies involved would benefit from making the LTE patents widely available at a low cost. I see this purchase as a way to make sure that the handheld products of the future have the low cost bandwidth they need.
How will Intel being on the losing side play out in the future Apple - Intel relations or are they already in the pan as Apple develops its A chips?
Intel knows damn well its chips are not usable in Apples handheld devices. As to Apples other products it is a matter of competition between Intel and AMD, ARM isn't even in the picture.
So many questions .... The biggest question maybe how will this change Android's future?
Anybody with any sense would stay away from Android and that really has nothing to do with this auction. One should just be happy that Google, an advertising and spy ware company, didn't get a hold of important LTE patents. Could you imagine, every LTE connection you make would force feed you a Google ad.
I'm not saying Rockstar will not do something stupid just that we are almost guaranteed a far different networking world if Google held the patents.
Where are you getting that Intel was ever part of the Apple consortium? My reading of the article is that they went from being an independent bidder to talking to both sides.
I must have been dreaming ... I could have sworn I read they were on the same team in previous articles. My bad.
$4.5bn is a stupid amount of money. What was in those patents?
This is what I have been wondering.
A big chunk of 4G for starters.
Could you be more specific? Or provide a cite/source for further info? Thanks.
Could you imagine, every LTE connection you make would force feed you a Google ad.
Danm... I never thought of that one.
But I did however imagine this auction taking place on eBay with the emails coming in, "You have been outbidded, Please bid a few millions more."
The winner then uses PayPal to pay 4.5 Billion plus taxes and shipping fees to the seller.
Then the patents (boxes and boxes of paper) are delivered by US mail.
Then the buyer goes WTF, that's not what the auction advertised, I want a full refund.
Then PayPal says, "Well, we can give you $200 refund. You'll have to get the rest in court. Good Luck to ya getting your money back from a foreign country."
I'm not saying Rockstar will not do something stupid just that we are almost guaranteed a far different networking world if Google held the patents.
That's probably very true. On an side bar re Google's moves to be even more aggressive, I notice the free APIs for placing Google maps in web sites are now updated to allow advertising, even competitors to the web site they are on unless you pay the big bucks. The MLS systems must be having a deep think! Personally I switched to http://wikimapia.org
Danm... I never thought of that one.
But I did however imagine this auction taking place on eBay with the emails coming in, "You have been out bided, Please bid a few millions more."
The winner then uses PayPal to pay 4.5 Billion plus taxes and shipping fees to the seller.
Then the patents (boxes and boxes of paper) are delivered by US mail.
Then the buyer goes WTF, that's not what the auction advertised, I want a full refund.
Then PayPal says, "Well, we can give you $200 refund. You'll have to get the rest in court. Good Luck to ya getting your money back from a foreign country."
If it said "out bided" I'd assume it was spam
I used to play a bit of poker online for money. I don't anymore, because it's now totally illegal, and a small amount of my poker money is still tied up online, thanks to the FBI.
Let's set some facts straight....
Playing online poker is NOT illegal. Playing online poker is NOT illegal even in the Unites States.
What is illegal in the Unites States is the transfer of money between US financial institutions and online gambling businesses.
Therefore, you can play online poker all you want in the United States. You simply can't get your money in and out of there via a US financial institution.
PS: I play a lot of online poker. Even today. And from the US.
This is great that Apple owns the LTE patents. I hope the A-team rips Samsung a new A-hole. I hope Google gets hit with a huge anti-trust lawsuit. Then I hope Apple releases a Liquidmetal battery and puts every other computer maker out of their misery.
The story everyone seems to be missing here is who gets what in this consortium deal? Most journalists and bloggers seem to assume the winners will all share equally in the IP spoils. But I have people who know people and the word I am hearing it that?s not the way the consortium works at all.
Some consortium members get patents, some get royalties, and some just get freedom from having to pay royalties.
Notice Nokia isn?t in the consortium? The Finnish company is apparently covered by Microsoft, tying Nokia even more firmly to Windows Phone.
Here?s the consortium participation as I understand it. RIM and Ericsson together put up $1.1 billion with Ericsson getting a fully paid-up license to the portfolio while RIM, as a Canadian company like Nortel, gets a paid-up license plus possibly some carry forward operating losses from Nortel, which has plenty of such losses to spare. For RIM the deal might actually have a net zero cost after tax savings, which the Canadian business press hasn?t yet figured out.
Microsoft and Sony put up another $1 billion.
There is a reportedly a side deal for about $400 million with EMC that has the storage company walking with sole ownership of an unspecified subset of the Nortel patents.
Finally Apple 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.
At the end of the day this deal isn?t about royalties. It is about trying to kill Android.
-Cringely
Could you be more specific? Or provide a cite/source for further info? Thanks.
http://www.nortel.com/corporate/tech...tents_0506.pdf
A detailed breakdown of all 6000+ patents in their gory detail? No, but it's pretty easy to find references to Nortels LTE patents such as
http://www.dslreports.com/shownews/N...ent-Pool-94153
Wrong... RIMM alone chipped in 770 Mil. and Ericson chipped in 340 Mil.
That leaves EMC, Sony, Microsoft and Apple.
Apple at most probably paid 2 Bills or less with the others paying half a Mil or more give or take a couple of Mils here and there.
Apple can greatly improve upon these technologies over the years while collecting the most royalties.
The patents are also great for defending against the likes of Motorola and Nokia.
Apple is now a telecom powerhouse with the devices to use that power.
Time will tell.
Great post .Apple scored big
9
Google is a wolf that wears sheeps clothing in public. It is perhaps one of the most evil companies in existence right now. Why? Because of their total disregard for the privacy of the individual.
Have you a few examples of this total disregard for individual privacy? There must be many obvious ones since you state it as fact.
You're both making the same error. Either an Apple product reads against someone else's patent or it doesn't. If it does, acquiring a different patent doesn't give Apple any freedom to produce the product (but it might help negotiate a cross-licensing deal). If it doesn't, then Apple didn't need to pay license fees in the first place. There are no parallel patents for a particular way of doing something, though there may be overlapping patents.
All serious academic work on auction theory is based on game theory.
The story everyone seems to be missing here is who gets what in this consortium deal? Most journalists and bloggers seem to assume the winners will all share equally in the IP spoils. But I have people who know people and the word I am hearing it that?s not the way the consortium works at all.
Some consortium members get patents, some get royalties, and some just get freedom from having to pay royalties.
Notice Nokia isn?t in the consortium? The Finnish company is apparently covered by Microsoft, tying Nokia even more firmly to Windows Phone.
Here?s the consortium participation as I understand it. RIM and Ericsson together put up $1.1 billion with Ericsson getting a fully paid-up license to the portfolio while RIM, as a Canadian company like Nortel, gets a paid-up license plus possibly some carry forward operating losses from Nortel, which has plenty of such losses to spare. For RIM the deal might actually have a net zero cost after tax savings, which the Canadian business press hasn?t yet figured out.
Microsoft and Sony put up another $1 billion.
There is a reportedly a side deal for about $400 million with EMC that has the storage company walking with sole ownership of an unspecified subset of the Nortel patents.
Finally Apple 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.
At the end of the day this deal isn?t about royalties. It is about trying to kill Android.
-Cringely
Wow, if this turns out to be true, then my earlier guess posted above was right on the money!
I predict that Apple engineers will do wonders with the LTE patents to the benefit of the world.
Time will tell.