Apple predicted to 'strike back' at Google with its own patent purchaseFollowing Google's bid to purchase Motorola Mobility, Apple is predicted to strike a deal — perhaps with competitors Nokia or RIM — to consolidate its already significant patent portfolio and better position itself both offensively and defensively.
In a note to investors on Tuesday, Jeffries & Co. analyst Peter Misek concluded that Apple is likely to "strike back" by acquiring patents from rivals such as Nokia or Research in Motion as a response to Googles purchase of Motorola Mobility. He also mentioned InterDigital, which has been widely viewed as a potential target for acquisition by Apple and other major players in the smartphone industry.
Misek identified what he considers 500 "essential 3G and 4G patents" that are part of Motorolas significant patent portfolio. Based on the price Google paid for Motorola, he values each of these at $20 million, given the fact that they could be used by Google not only to defend Android against potential attacks from Apple, but also to counterattack the Cupertino-based company and other rivals in the future.
Apple is currently involved in various lawsuits both in the U.S. and internationally with some of its most important competitors in the mobile business. Apple has either sued, been sued, or both, companies like HTC, Motorola, Samsung, Nokia and Kodak over alleged intellectual property infringement. Such patent-based wars are likely to continue even after Google would complete its Motorola acquisition.
Misek analyzed the patent portfolios still in play from Nokia, RIM or InterDigital and concluded that any of them could be an important target for Apple in the future. Apple is currently sitting on impressive cash reserves, totaling $76.2 billion.
The analyst believes that Apple is in a position that would allow it to bid for any of the patents owned by it rivals. He believes Apple will focus specifically on "wireless patents that are truly essential and part of the standards."
Apple may already be paying Nokia "significant royalties for cross-licensing," Misek said, adding that the Finnish handset maker owns "at least 50 essential 4G patents and likely over 100 essential 3G patents" of interest." Another potential target, RIM, is said to have spent over $5 billion in developing its own patent portfolio with InterDigital also on the analysts list as a potentially interesting purchase for Apple.
Despite Jeffries note to investors, there have been no actual indications from Apple that the Cupertino-based company is actually going forward with such patent-buying plans. Google's $12.5 billion acquisition of Motorola, announced on Monday, is still pending regulatory approval.
Google's chief executive, Larry Page, candidly admitted that his company's purchase of Motorola was prompted by legal action from competitors — namely Apple and Microsoft — against the Android platform. Page said he believes the measures taken by Apple and Microsoft have been "anticompetitive," and ownership of Motorola's patents will better position the search giant to defend its mobile operating system from legal threats.
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