Apple and Google are reportedly competing for patents being sold by bankrupt Canadian telecom Nortel. Nortel filed for bankruptcy in January 2009 and sold most of its business units to rivals Ericsson, Hitachi, and others. Nortel's remaining assets include 4,000 patents that have been organized into six groups including one for wireless handsets and 3G/4G wireless infrastructure. Nortel was previously the second largest supplier of CDMA equipment in the world and was involved in both WiMAX and LTE technology. Sales of these patents are expected to generate $1 billion for Nortel's creditors.
According to Reuters' unnamed sources, these wireless patents have attracted the attention of Apple, Google, Motorola, and RIM. Research firm Fairfield Resources suggests Nortel owned seven of the 105 patent families considered to be critical to the development and deployment of LTE and SAE (Service Architecture evolution), a core network architecture of LTE. Nortel's LTE assets are not as hefty as Nokia, which owns 57 patent families, or Ericsson, which has 14, but are more on par with Qualcomm and Sony. This is an excellent opportunity for the winning bidder, as patents of this nature usually do not become available on the market. Bidding on these Nortel patents reportedly began seven months ago and all bids are currently sealed.
Google may be interested in these patents to help beef up its wireless patent portfolio. Google has a vested interest in mobile, as Android, its mobile operating system, is competing with Apple for the #2 mobile OS slot. Similarly, Apple may be eyeing these patents for future 4G versions of the iPhone and the iPad. Though the Cupertino company has yet to release a device on Verizon Wireless, circulating rumors suggest it is interested in producing an LTE-enabled version of the iPhone for the wireless carrier.
AT&T, the sole carrier of the iPhone in the U.S., is also rolling out an LTE network, but it is a year behind rival Verizon. This LTE revolution is not confined to North America; LTE and WiMAX are slowly replacing current 3G technology worldwide. There is little doubt that LTE and WiMAX will be the standards of choice for future wireless technology and owning this small arsenal of 3G/4G wireless patents would certainly give the winning bidder a leg up over its competition.