Apple paid $2.6B lion's share of $4.5B Nortel patent acquisition
Apple supplied more than half of the $4.5 billion paid by a consortium of companies to acquire Nortel's patent portfolio, new regulatory filings show.
Apple revealed in its 10-Q filing this week that it paid about $2.6 billion in the Nortel patent sale, analyst Maynard Um with UBS highlighted in a note to investors on Thursday. That's a sum greater than the $2 billion Apple was rumored to have paid shortly after the deal was announced.
Other members of the consortium included Microsoft, Research in Motion, Sony Ericsson, and EMC. In late June, the companies won a bidding war to obtain more than 6,000 patents from Nortel, which filed for bankruptcy in January of 2009.
Previous claims from Reuters suggested that RIM paid $770 million for its share of the patent portfolio, while EMC allegedly contributed $340 million.
The consortium beat out Google, which had established the minimum bid for the auction with a starting offer of $900 million. A number of bidders were interested in the patent trove because of key inventions related to the high-speed long-term evolution 4G wireless standard.
Apple's 10-Q made no mention of the licensing agreement it entered into with rival Nokia in June. That deal includes ongoing royalties in addition to a one-time lump sum payment, both of which remain secret. But evidence in Nokia's quarterly earnings issued on Thursday suggests that Apple's share was no more than $600 million.
Beyond the Nortel patents and Nokia agreement, Um also noted that the 10-Q reveals Apple's warranty accruals were higher than claims for the fourth straight quarter. For the past year, Apple has "overaccrued" claims by about $600 million.
"While we recognize that accruals are for estimated future claims and that claims increased sequentially, we believe the company still has a healthy level of accruals unless claims were to increase significantly," he wrote.
If Apple were to reduce its reserves in the same magnitude it has with $600 million in claims over the past year, Um estimates the company would see a gross margin benefit of 200 basis points.
Apple revealed in its 10-Q filing this week that it paid about $2.6 billion in the Nortel patent sale, analyst Maynard Um with UBS highlighted in a note to investors on Thursday. That's a sum greater than the $2 billion Apple was rumored to have paid shortly after the deal was announced.
Other members of the consortium included Microsoft, Research in Motion, Sony Ericsson, and EMC. In late June, the companies won a bidding war to obtain more than 6,000 patents from Nortel, which filed for bankruptcy in January of 2009.
Previous claims from Reuters suggested that RIM paid $770 million for its share of the patent portfolio, while EMC allegedly contributed $340 million.
The consortium beat out Google, which had established the minimum bid for the auction with a starting offer of $900 million. A number of bidders were interested in the patent trove because of key inventions related to the high-speed long-term evolution 4G wireless standard.
Apple's 10-Q made no mention of the licensing agreement it entered into with rival Nokia in June. That deal includes ongoing royalties in addition to a one-time lump sum payment, both of which remain secret. But evidence in Nokia's quarterly earnings issued on Thursday suggests that Apple's share was no more than $600 million.
Beyond the Nortel patents and Nokia agreement, Um also noted that the 10-Q reveals Apple's warranty accruals were higher than claims for the fourth straight quarter. For the past year, Apple has "overaccrued" claims by about $600 million.
"While we recognize that accruals are for estimated future claims and that claims increased sequentially, we believe the company still has a healthy level of accruals unless claims were to increase significantly," he wrote.
If Apple were to reduce its reserves in the same magnitude it has with $600 million in claims over the past year, Um estimates the company would see a gross margin benefit of 200 basis points.
Comments
Google blinks in Oracle patent case, indicates willingness to pay
http://fosspatents.blogspot.com/2011...tent-case.html
Seems illogical for them to pay to benefit others in the consortium....
things are not looking good for Android.
Google blinks in Oracle patent case, indicates willingness to pay
http://fosspatents.blogspot.com/2011...tent-case.html
Let them pay for every Android activations and see if Google will clarify the definition of it
So, If Apple paid the most does that mean that they will benefit the most, or have exclusive rights to some of the patents?
Seems illogical for them to pay to benefit others in the consortium....
The patents are usually split up, and I believe Apple got all the patents relating to LTE.
Depending on how the deal went down, the members of the consortium may get a free license to use the IP of those patents that they did not outright buy. Any other companies that want to license the IP will have to pay royalties to Apple.
But, you never really know... anything is possible.
Here is it, though, for anyone interested
http://files.shareholder.com/downloa...193/filing.pdf
Corroborating links are always helpful.
So, If Apple paid the most does that mean that they will benefit the most, or have exclusive rights to some of the patents?
Seems illogical for them to pay to benefit others in the consortium....
Google is an unusual competitor. Their only real business is advertising, but since advertising can be appended to almost anything and pays for everything they seem intent on offering free versions of all possible software, while at the same time working with hardware vendors to compete in that arena as well. So they're up against everyone, but with a business model that masks their true ambitions and intentions.
At the same time, they've proven themselves to be somewhat contemptuous of IP and copyright concerns, using their "free and open" mantra to paint themselves as champions of an egalitarian future while jealously guarding their actual sources of revenue-- the algorithms that undergird their advertising and page ranking business.
So you end up with an unusually broad coalition of businesses-- content owners, software vendors, online service providers, hardware manufacturers, IP rights holders, networking companies, etc.-- who have a vested interested in limiting the scope of Google's sprawl. Google wants nothing less than each and every digital transaction to pass through their servers, which is to say the entirety of modern life. It's not surprising that the rest of the world might take exception to that, and that stark reality might make for some strange bedfellows.
So you end up with an unusually broad coalition of businesses-- content owners, software vendors, online service providers, hardware manufacturers, IP rights holders, networking companies, etc.-- who have a vested interested in limiting the scope of Google's sprawl. . .
. . . and that stark reality might make for some strange bedfellows.
Nice post Addabox
Google wants nothing less than each and every digital transaction to pass through their servers, which is to say the entirety of modern life. It's not surprising that the rest of the world might take exception to that, and that stark reality might make for some strange bedfellows.
FWIW, not many years ago Microsoft had similar ambitions. I can't say that they didn't worry me at all back then -- far from it -- but the lesson to be learned from Microsoft's failure to deliver, is that ambitions don't necessarily create realties.
FWIW, not many years ago Microsoft had similar ambitions. I can't say that they didn't worry me at all back then -- far from it -- but the lesson to be learned from Microsoft's failure to deliver, is that ambitions don't necessarily create realties.
But they often do create successes too. A failure by someone else doesn't mean you will. Apple knows that.
FWIW, not many years ago Microsoft had similar ambitions. I can't say that they didn't worry me at all back then -- far from it -- but the lesson to be learned from Microsoft's failure to deliver, is that ambitions don't necessarily create realties.
True, but I think the combination of internet as totalizing construct and Google's strategy of using advertising as both the means and funding source for insinuating themselves into every aspect of that construct puts them on a different footing than the Microsoft of old. Google is everywhere and nowhere and ostensibly free, with the true cost of their interlocking network of subsidized services and conduits only calculable once it's so entrenched as to be more or less the world itself.
Doesn't guarantee success, of course, but I don't know if we have historical antecedents for what they're doing that provide a useful roadmap.
But they often do create successes too. A failure by someone else doesn't mean you will. Apple knows that.
Indeed - and the fact is that Google almost certainly will end up with far more of the online experience than MS could ever hope to capture. But it's not clear how much that would bother a hardware/software integrator like Apple.
Google wants to turn Facebook into the new myspace, and with a platform of 100million devices they have a good chance. Suppose however they did a deal with Apple and get deep G+ integration into iOS. Suddenly you're looking at 300million G+ enabled mobile devices - and Facebook is suddenly looking very very lonely.
Apple might be more than happy to do such a deal, if Google agreed to get off their lawn.
Lion's share is 100%
It means the largest portion.
But they often do create successes too. A failure by someone else doesn't mean you will. Apple knows that.
True, but I think the combination of internet as totalizing construct and Google's strategy of using advertising as both the means and funding source for insinuating themselves into every aspect of that construct puts them on a different footing than the Microsoft of old. Google is everywhere and nowhere and ostensibly free, with the true cost of their interlocking network of subsidized services and conduits only calculable once it's so entrenched as to be more or less the world itself.
Doesn't guarantee success, of course, but I don't know if we have historical antecedents for what they're doing that provide a useful roadmap.
Maybe, but just. During the 1990s and 2000s Microsoft's ubiquity was total and their ambition to roll anything and everything of value into Windows plainly advertised. They controlled virtually all of the gateways and they were setting themselves up to collect tolls. "Free" in name if not in reality was part of their strategy as well. They even had a name for it: "embrace and extend."
Experience suggests that total dominance is harder to accomplish than it looks. Microsoft wasn't good enough to make it happen with a 95% market share. I doubt Google is good enough either.