Free Newsletter

InterDigital's huge patent mountain may come to market

IPR giant is exploring strategic options, including sale, as Nortel auction highlights strong value of LTE patent holdings

By CAROLINE GABRIEL

Published: 20 July, 2011

READ MORE: M&A | InterDigital | Patents/IPR | LTE

Hard on the heels of the auction of Nortel's massive store of patents, another IPR treasure trove could come to the market, perhaps giving Google another chance to shore up the position of Android against attacks from Apple, Oracle and Microsoft. InterDigital said this week that it planned to "explore its strategic options", including the possibility of putting itself or some of its patents up for sale.

This highlights the rising value that is attached to wireless patents, which not only offer licensing revenues to their owners, but help protect them from litigation and shift the balance of power in key technologies. This has been very clear in the spate of lawsuits against various Android players, seeking to rob the OS of its low cost advantage and create fear among potential adopters. InterDigital has a huge IPR position in the mobile world, being one of the major patent holders in 3G and an arsenal of about 8,800 patents (even more than Nortel's 6,000 and many in similar areas). It also has a further 10,000 patent applications in process around the world and numbers all the handset majors among its licensees.


In a statement, Terry Clontz, chairman of InterDigital's board, said: "Over the past year we have seen the value of intellectual property rise substantially as major players in the mobile industry increasingly understand the strategic and economic value of this type of asset." The company retained Evercore Partners and Barclays Capital as its financial advisers.

In January, ZTE published an analysis of various IPR databases, which rated InterDigital as the leading holder of essential patents in LTE, with its Patent Holdings arm controlling 13% and its Technology unit 11%. After that came Qualcomm with 13%, Nokia and Samsung on 9% each, Ericsson and Huawei on 8%, ZTE on 7%. LG on 6%, and NTT DoCoMo on 5%. A different study by Informa also placed InterDigital in the top three, along with Qualcomm and Samsung, and closely followed by Huawei (though Ericsson itself claims the lead position in essential patents). In W-CDMA, Qualcomm, Nokia, Ericsson and InterDigital were dominant.

Whatever the precise rankings, it is clear that InterDigital has a major position in LTE, and one which, in the current situation, is vendor neutral. Should that pass to a manufacturer, it could create all kinds of shifts in the balance - towards China, if Huawei or ZTE stepped in; towards Google, if it snapped up the IPR to support Android devices; or to shore up the existing giants like Qualcomm, Nokia, Ericsson or Microsoft. It could also be a way for Apple to strengthen its hand in wireless essential IPR, where it is far weaker than in software or device patents, as its defeat in its patents with Nokia demonstrated.

The Nortel auction and intensifying IPR battles in the handset world are clearly grabbing boardroom and market attention. According to Reuters, the value of InterDigital's stock has increased by 26%, adding $500m to its market value, on the basis of its new plan and the $4.5bn sum paid for Nortel's assets (which was more than the total spent on acquiring all its equipment businesses). The firm now has a market capitalization of nearly $2.5bn.

Pages: 1 | 2

Related Stories

Share

  • email story Email
  • print story Print
  • digit digit
  • facebook facebook
  • Twitter Twitter
  • Linked-in Linked-In
  • Comments (0)

COMMENTS

Add Comment
No comments yet. Be the first to add a comment!
MARKET PLACE

    BYOD: Market Analysis and Forecasts

    An in-depth insight into the rise of BYOD policies within the enterprise and analysis of the impact the trend will have on IT departments,...

    Voice Command, Control and Search on Mobile Phones: Market Analysis & Forecasts

    This report provides a comprehensive insight into the growing importance of voice command, control and search on handsets, analysing...

    Data Centre Network Equipment: Market Analysis and Forecasts

    This report provides a global assessment of the data centre network equipment market. Besides assessing the key market trends, sub-markets...

    HetNet Market Summary & Forecasts: Macro Cells, Small Cells & Wi-Fi Offload

    Carriers are struggling to cope with the explosion of data traffic on their networks, and the additional deployment of LTE and legacy...

    Over-the-Top Communications: Threats & Opportunities for Mobile Operators

    This report examines the implications of widespread adoption of mobile over-the-top IP communications for mobile operators, handset...

    Portable Gaming Consoles: Market Analysis and Forecasts

    This report provides a global assessment of the PGC market. In addition to assessing the key market drivers, market barriers, vendor...
WHITE PAPERS

    Satellite Phones: Will Dual Mode Help the Phoenix Rise from the Ashes?

    Satellite phones have followed an arduous path since their much-hyped launch more than a decade ago. The hype was followed by an e...

    Mobile Widget Platform Market Analysis: Understanding the Business Case and ROI

    This white paper presents an analysis of the mobile widget platform market, as well as metrics supporting a mobile carrier?s busin...

POST COMMENT

You must be a registered user to post a comment. or
Username *
Email *
Comment *