Rockstar's $4.5bn
Well, it is now official. Nortel's 6,000 patent portfolio has been sold to Rockstar, a bidding consortium consisting of Apple, Microsoft, Research in Motion, Sony, Ericsson, and EMC for $4.5bn. To put this in context, the starting stalking horse bid was $900mn from Google.
It is said that the winner companies were bidding mostly for defensive purpose against Google and its Android eco-system. The most obvious targets, beyond Google, would be Samsung and HTC. Words on the street is that there is regulatory concerns on the new IP owners could inhibit the competitive nature of smartphone developments.
The saga continues.
Alcatel-Lucent's $20+bn
With Nortel's auction done, inquiring minds cannot help but wonder what comparable could be drawn in the IP world. An investment banking analyst did some number crunching and suggested that Alctel-Lucent, who owns the IP portfolio of the old (AT&T) Bell Lab, could fetch more than $20 billion alone in a similar auction.
Contrasting with ALU's market cap these days at less than $20bn. I wonder if there may be an activist investor or two who are making plans as we speak.
At $15 per Smartphone
Valuing IP is a tricky business. And, the Nortel's auction, in no small part, is impacted by the recent explosive growth of smartphone eco-systems. To give it a more concrete context, MSFT is rumored to be asking for $15 licensing fee per phone that Samsung ships that uses Android. And, at 19mn phones for the last three months and continuing growth in the foreseeable future, this is real money that even MSFT cannot ignore.
* Nortel's $4.5bn: http://www.bloomberg.com/news/2011-07-01/nortel-sells-patent-portfolio-for-4-5-billion-to-group.html
* Bell Lab's $20bn: http://www.lightreading.com/document.asp?doc_id=209655&f_src=lightreading_gnews
* $15 per for MSFT: http://www.reuters.com/article/2011/07/06/us-samsung-microsoft-idUSTRE7651DB20110706
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