Rockstar patent sale could net Apple $392 million in March quarter

Posted:
in AAPL Investors edited March 2015
The sale of patents owned by the Rockstar Consortium of companies could bring a windfall of $392 million in additional cash to Apple's March quarter, estimates from one analyst predict.

Rockstar Consortium Logo


Apple originally paid the lion's share for a series of patents purchased by the companies acquired from Nortel. The iPhone maker accounted for 58 percent, or $2.6 billion, of the $4.5 billion that was spent as part of the deal.

RPX completed the purchase of Rockstar for $900 million earlier this year, shedding 4,000 patents and ending ongoing lawsuits in the wireless industry. Following the sale, consortium member BlackBerry reported a gain of $115 million, and the Canadian smartphone maker originally paid $770 million -- or 17 percent -- of the original purchase.

Using these figures as a baseline, analyst Maynard Um of Wells Fargo calculated that Apple could see a gain of about $392 million in the March quarter. That would equate to about 5 cents in the company's earnings per share, he said.

Um also sees the sale of the Rockstar patents as an indication of a less litigious wireless industry, which he sees as a positive for everyone involved. Previously, mobile companies were engaged in a broad series of lawsuits that spanned across the globe.

Exactly how much Apple took home from the Rockstar patent sale will likely be revealed on April 27, when the iPhone maker is scheduled to reveal the results of its second fiscal quarter of 2015.

Comments

  • Reply 1 of 11
    boredumbboredumb Posts: 1,408member

    "a windfall of $392..."

     

    Cool!  Now Apple can afford its own Edition watchband!

  • Reply 2 of 11
    Quote:

    Originally Posted by sog35 View Post

     

    Bought patents for $4.5 billion.

    Sold for 900 million.

    Profit?




    Questionable... of the 6000 Nortel patents, 2000 were split up between the partners.  It's unclear what Apple got.  The rest (4000) were sold for 900 million for the pledge that they not be used for offensive litigation.  It really depends on what patents Apple kept and what they're saving in litigation hassles by keeping those 4000 patents out of the hands of trolls.

     

    But yeah.. pure bottom line.... not a profit.

  • Reply 3 of 11
    konqerrorkonqerror Posts: 685member
    Quote:

    Originally Posted by Serendip View Post

     

    Questionable... of the 6000 Nortel patents, 2000 were split up between the partners.

     

    But yeah.. pure bottom line.... not a profit.


     

    I don't see how your conclusion came from the first fact. Companies kept the valuable patents and offloaded the rest. The profit or loss is only determined by the value of the kept patents plus the  $900 MM.

  • Reply 4 of 11
    Quote:

    Originally Posted by konqerror View Post

     

     

    I don't see how your conclusion came from the first fact. Companies kept the valuable patents and offloaded the rest. The profit or loss is only determined by the value of the kept patents plus the  $900 MM.


     

    Yes profit/loss would be $900m + value of kept patents.  I don't know if that would hit $4.5b so profit?  I call it questionable.

     

    Sog35 was sarcastically questioning (I assume) if $900m was a profit if they paid $4.5b and my conclusion was to agree with him that no.. if you were just to look at the bottom line of a financial statement ("pure bottom line") then no.. $900m is < $4.5b so definitely not profit.

  • Reply 5 of 11
    adrayvenadrayven Posts: 460member
    "Um also sees the sale of the Rockstar patents as an indication of a less litigious wireless industry, which he sees as a positive for everyone involved. Previously, mobile companies were engaged in a broad series of lawsuits that spanned across the globe."

    Dare I say, Ummmmmm... yeah, with massive exception of Ericsson - Which is going after Apple hard.. once they get done with them, the rest of the industry.

    Ericsson these days has gone from ok feature phone maker, to patent '**ore' that sues everyone.. Only people left at Ericsson are lawyers ... because they see $$$..

    Those $$$ are our money, the buck just gets passed onto the consumer..
  • Reply 6 of 11
    This sentence makes no sense:

    "Apple originally paid the lion's share for a series of patents purchased by the companies acquired from Nortel."

    Did you mean "patents purchased by the companies acquired by Nortel." OR "patents acquired from Nortel." Or something else entirely.
  • Reply 7 of 11
    gatorguygatorguy Posts: 19,713member
    adrayven wrote: »
    "Um also sees the sale of the Rockstar patents as an indication of a less litigious wireless industry, which he sees as a positive for everyone involved. Previously, mobile companies were engaged in a broad series of lawsuits that spanned across the globe."

    Dare I say, Ummmmmm... yeah, with massive exception of Ericsson - Which is going after Apple hard.. .
    Apple cast the first stone in this one, bringing a suit against Ericsson. Perhaps they figured Ericsson was eventually going to sue them so they'd get in the first punch? Who knows.
  • Reply 8 of 11
    "The sale of patents owned by the Rockstar Consortium of companies could bring a windfall of $392 million in additional cash to Apple's March quarter..."

    I must be getting jaded. That doesn't seem like much money...I know it is...but it just seems like a piddling amount. I guess after Apple paid ten times that for a pair of ear phones and a list of music, anything in the hundred million range is chicken feed.
  • Reply 9 of 11
    calicali Posts: 3,495member
    Did they ever get the chance to sue the pants off Giggle?
  • Reply 10 of 11
    xixoxixo Posts: 417member
    Everytime I see stories about this, I think they're talking about the company that developed "Grand Theft Auto"
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