Nortel: Get Ready for the LTE Patent Shootout

After buying Nortel’s (NRTLQ.PK) CDMA business and LTE R&D unit, Ericsson (ERIC) appears to have its sites set on Nortel’s LTE patents – an asset that Research in Motion (RIMM) has been aggressively positioning itself as the logical buyer.

Mark Henderson, president of Ericsson Canada, told Bloomberg that: “Any asset that came up for sale that was complementary to our business we would look at.”

Nortel has about 3,000 patents, including about 100 related to LTE. The LTE patents are attractive because as LTE is embraced as the next-generation wireless technology, the company controlling these patents could have a lucrative and strategic asset if other companies need to license them.

Ericsson’s interest in the LTE patents is obviously terrific news for Nortel’s creditors because it could lead to an expensive battle between Ericsson and RIM for the LTE patents. RIM, which has been involved in several high-profile patent disputes, wants the LTE patent because they will strengthen its market clout with wireless carriers and telecom suppliers.

The company has been aggressively and publicly lobbying the Canadian government to review the Nortel-Ericsson deal because it contends the CDMA and LTE R&D assets are of “national interest”. But this is really just a strategic smokescreen as the RIM’s real target are Nortel LTE patents.

When these patents eventually go on the block, there’s no doubt RIM will impress upon the federal government that these assets are of “national interest”. There’s no doubt RIM will likely have to pay a healthy price for the assets but with $1.7-billion of cash and short-term investments, it has the financial muscle to go high.

While Ericsson contemplates bidding for more of Nortel’s assets, it is still waiting to see if the Canadian government will review the CDMA/LTE R&D business.

“We’ve met with them openly and tried to give them all the information that they need . . . and also to submit facts around any concerns around national security,” Ericsson’s Henderson told the Ottawa Citizen. “So we’re openly discussing with them and waiting for their decision.”

Comments

[JamesApple:]

The most prominant telecommunication is fiber optic which is by far the most stable, robust, and fastest at speeds beyond 44 gigabits per second in multiplex mode. In wireless, there are 7 technologies far superior, robust, and available for the long term future than LTE, which is why Nortel is selling LTE because Nortel cannot compete with other more advanced researches and development.

Rim calls Nortel LTE 'national interest'. Rim has only $1.67 billion in cash whereas Apple has $37.6 billion in cash, Microsoft has $31.2 billion, Ericssion has $17.9 billion in cash. Rim's profit margin is 20.2% whereas Apple's profit margin is 40.7%. Rim continues to rely on selling blackberrys to Verizon at 77% below retail value, offering multiple blackberrys giveaways per unit sale in order to maintain Rim's minimum annual pro forma sales volume of 22 million units for book value for balance sheet reporting to the governing bodies and stakeholders, artificially boosting the sales amount and pushing the costs and deductions into future periods in order to make Rim's financial status look presentable. Nortel shareholders know Rim's real status, that is the single reason why Nortel does not wish to end up in Rim's hands.

Trying to pin a 'national interest' label on Nortel assets is akin to trying to pin a 'top secret' label on a bottle of maple syrup.

Rim should cease to operate as a business concern before year 2013, as Jim Balsillie deteorates at the speed of light both as a person and as a businessman most recently calling NHL owners 'criminals'. Perhaps he is attempting to appeal to the group of teenagers who are blatantly crude and rebellious, anti-social?

Sales of blackberrys are losing to the rising sales of Apple which is gaining very rapidly in both consumer and now the enterprise businesses.

Aug 23 06:33 PM

[JamesApple:]

Rim should try to pin a 'national interest' label on Apple iPhones and prevent the iPhones from being sold.

It's just calously ridiculous and remarkably desperate of Rim.

Aug 23 06:49 PM

[yes4aapl:]

Nortel shareholders know Rim's real status, that is the single reason why Nortel does not wish to end up in Rim's hands.
======
re
Wow, your post is very remarkable and interesting. I would say you stole my ideas but saying that Nortel's shareholders....
wow
There are no such thing like Nortel's shareholders anymore!

Aug 23 07:32 PM

[morleyl:]

I am a little confused. why is Ericsson able to bid on the LTE Patents since they got the CDMA business? I got the impression from the RIM argument, that they were forbidden to bid on other assets if they bid on CDMA. Was this provision specific to RIM and not other bidders?

Aug 23 09:17 PM

[JamesApple:]

Nortel said Rim did not follow the procedures in bidding. As a result Ericsson won the bid for Nortel's CDMA and LTE research and development.

Aug 23 11:26 PM

[EJL:]

This sentence makes zero sense.

On Aug 23 06:33 PM JamesApple wrote:

Rim continues to
> rely on selling blackberrys to Verizon at 77% below retail value,
> offering multiple blackberrys giveaways per unit sale in order to
> maintain Rim's minimum annual pro forma sales volume of 22 million
> units for book value for balance sheet reporting to the governing
> bodies and stakeholders, artificially boosting the sales amount and
> pushing the costs and deductions into future periods in order to
> make Rim's financial status look presentable.

Aug 24 10:13 AM

[JamesApple:]

True. Rim's mindless 'land grab' initiative is senseless, in the end this senseless 'land grab' will cost Rim its life.

Aug 24 12:27 PM

[Wireless Wiz:]

RIM is acting in its best interest by trying to acquire IP that will be useful when others try to come after them on IP issues in the future. It's that simple.

And James, come on, please write something intelligent for once! This used to be kind of funny, but it seems this individual possesses no real knowledge and only a desire to be inflammatory. Not only are his facts wrong (RIM cash is actually $2.5B while Apple's is about $31B or so), but the sentence about balance sheet and book value relating to fraudulent device sales and future deductions, etc is so absurd on the face I don't know why he even bothers.


On Aug 23 06:33 PM JamesApple wrote:

> The most prominant telecommunication is fiber optic which is by far
> the most stable, robust, and fastest at speeds beyond 44 gigabits
> per second in multiplex mode. In wireless, there are 7 technologies
> far superior, robust, and available for the long term future than
> LTE, which is why Nortel is selling LTE because Nortel cannot compete
> with other more advanced researches and development.
>
> Rim calls Nortel LTE 'national interest'. Rim has only $1.67 billion
> in cash whereas Apple has $37.6 billion in cash, Microsoft has $31.2
> billion, Ericssion has $17.9 billion in cash. Rim's profit margin
> is 20.2% whereas Apple's profit margin is 40.7%. Rim continues to
> rely on selling blackberrys to Verizon at 77% below retail value,
> offering multiple blackberrys giveaways per unit sale in order to
> maintain Rim's minimum annual pro forma sales volume of 22 million
> units for book value for balance sheet reporting to the governing
> bodies and stakeholders, artificially boosting the sales amount and
> pushing the costs and deductions into future periods in order to
> make Rim's financial status look presentable. Nortel shareholders
> know Rim's real status, that is the single reason why Nortel does
> not wish to end up in Rim's hands.
>
> Trying to pin a 'national interest' label on Nortel assets is akin
> to trying to pin a 'top secret' label on a bottle of maple syrup.
>
>
> Rim should cease to operate as a business concern before year 2013,
> as Jim Balsillie deteorates at the speed of light both as a person
> and as a businessman most recently calling NHL owners 'criminals'.
> Perhaps he is attempting to appeal to the group of teenagers who
> are blatantly crude and rebellious, anti-social?
>
> Sales of blackberrys are losing to the rising sales of Apple which
> is gaining very rapidly in both consumer and now the enterprise businesses.

Aug 24 01:47 PM

[JamesApple:]

Did Rimm pay you to cover up for them?

Aug 24 03:57 PM

[JamesApple:]

Note: Rim has a very long list of lawsuit losses the latest is a $237 Million penalty payment. Rim top management had been charged and jailed for frauds by commissions like the SEC.

It will not be an understatement to say Rim will continue to acquire more lawsuit losses, frauds, and jail terms.

Aug 24 04:25 PM

[Wireless Wiz:]

This proves my point even further.

1. Apple backdating options? This is exactly the same thing as what RIM's execs settled for. You don't find any irony in your ridiculous statements?
2. The "lawsuit losses" are a normal part of doing business. These guys (including Apple) get sued all the time by patent trolls. Anyone with one any sense of this business would intrinsically understand this.

I will no longer respond to your reprehensible behavior. The only way I get "paid" is by looking at the industry through a rational prism and by owning both AAPL and RIMM over the last several years. There's more exciting stuff on the horizon for both companies. The new Storm that is coming out soon should actually be a huge improvement over the first one (which was garbage) and it will surprise people. But don't believe me, just let it unfold. Good luck with your hatred and negativity, James.

Like Barney Frank said recently, "What planet do you spend most of your time on? Having a conversation with you is like, I don't know, trying to have a conversation with a dining room table."


On Aug 24 04:25 PM JamesApple wrote:

> Note: Rim has a very long list of lawsuit losses the latest is a
> $237 Million penalty payment. Rim top management had been charged
> and jailed for frauds by commissions like the SEC.
>
> It will not be an understatement to say Rim will continue to acquire
> more lawsuit losses, frauds, and jail terms.

Aug 24 09:10 PM