‘Not Just Another G’: Apple’s Intel Purchase Underscores the Sprint to 5G

“[Apple is] getting a seat at the [5G] table now, but it’s still one of the minor players. It will be interesting to see if they can pull it off.” – William Mansfield

5G - https://depositphotos.com/188095512/stock-photo-businessman-using-5g-network-with.htmlEarlier this summer, Intel announced that some 8,500 patent assets (i.e., issued patents and pending patent applications) would be auctioned. Approximately 6,000 assets related to 3G, 4G, and 5G cellular standards, while 1,700 assets relate to wireless implementation of cellular standards. According to initial reports from IAM, Intel was hoping to sell these patents separately from the smartphone modem business, although they were open to the possibility that a prospective buyer might seek to acquire both the patent assets and Intel’s smartphone modem business.

Shortly after the Intel patent assets were announced as available for sale, Intel abruptly took the assets off the market in favor of negotiating with a single interested suitor. Very quickly, news broke that the negotiations with that unidentified suitor were quite advanced, suggesting that the Intel auction announcement was nothing more than a negotiating ploy to get the unidentified suitor back to the table and for the suitor to realize that they could lose the patent assets if they did not play their hand correctly and misidentified the leverage involved in the negotiation.

It has recently come to light that the unidentified suitor for the Intel patent assets was none other than Apple, just as IAM has predicted in its initial reporting. So, now we know that Apple will buy the majority of Intel’s modem business, including the patent assets, for $1 billion.

A Likely Ploy

While not to take anything away from the IAM prediction, Intel’s suggestion that it was their preference not to sell the modem business unit, and only the patent assets, substantially reduced the number of possible suitors to a small handful of entities that could have the capital to pull off such a deal, and who would not need the business unit. The deal would be too big for a patent troll, and it would be too big for many of the smaller 5G industry innovators. That left Ericsson, Nokia, and Huawei as obvious possibilities, and Apple, given it has been known that they wish to enter the modem marketplace and would need patent assets for defensive purposes in order to do so.

Another indication that the Intel patent auction announcement was a negotiating ploy is the speed with which this $1 billion deal came into being. From announcement of the patent assets being available to private negotiations and the assets being at least temporarily off the market to being sold to Apple, the deal took no more than a matter of weeks to conclude. Therefore, it can be said with great certainty that the deal has been in the works for many months, if not longer.

The move is a good one from a strategy perspective, said Kim Chotkowski, Vice President and Head of Licensing Strategy and Operations for InterDigital, Inc. during IPWatchdog’s webinar, “Examining Apple’s Blockbuster Purchase of Intel’s Modem Business for $1 Billion” earlier today. “It helps with business certainty and control and helps to reduce reliance on external partners,” Chotkowski said. The widely held assumption is that the 5G technology and talent associated with the Intel assets Apple has acquired are what drove the sale, although the questions remains as to whether Intel’s technology is really developed enough to be of value. “It will be interesting to see what Apple can really make of it,” said William Mansfield, Head of Consulting and Customer Success for LexisNexis PatentSight, who also participated in the webinar. He added: “They tried to use Intel chips to wean themselves off Qualcomm and that wasn’t successful. 5G is what everyone’s driving toward but whether Intel has the right assets is a question; they have a lot of work to achieve that still.”

Apple Has Its Work Cut Out

Mansfield provided data (see below) that shows Apple’s purchase of the Intel assets will bump it up into the mid-range of competitive players in the telecoms space. This is key as those players vie to be first in the race to roll out 5G technologies, which Chotkowski and Mansfield said will not be the typical jump from one G to the next. The 5G market is estimated to be $2.2 trillion when fully rolled out said Chotkowski, and the speeds and connectivity it will make possible will be light years ahead of the current standard. “[Apple is] getting a seat at the table now, but it’s still one of the minor players. It has its work cut out. It will be interesting to see if they can pull it off,” Mansfield said.

The LexisNexis PatentSight data also showed that Intel’s portfolio development has leveled out somewhat in the last two years (see below), so whether Apple can revitalize it remains to be seen.  Chotkowski, Mansfield and IPWatchdog CEO Gene Quinn all agreed that, as standards develop around 5G, patent quality will be paramount over quantity. While Apple’s purchase bumps up its quality indicator slightly according to PatentSight, Qualcomm still remains far in the lead for size and quality, with Interdigital at the top for quality. Mansfield explained that the PatentSight metric for quality is the multiplication of an asset’s technological relevance by the number of economies/ markets in which it’s protected.

Not Your Average G

Chotkowski estimated that 5G development will overtake LTE/ 4G within the next couple of years and agreed with Quinn that full deployment of 5G technologies to consumers should happen by 2021. All panelists agreed that now is the time to get in the game.

“If you’re not paying attention to 5G you really need to because it’s not just another G,” Quinn said. “The speed it’s going to enable will be otherworldly once fully deployed and everyone starts using it. You have catching up to do if you’re not already involved.”

Chotkowski added: “The 5G market is such an open opportunity, there’s no clear path for anyone, but [Apple’s decision to] acquire all of that information and utilize it internally is going to be worth it. 5G is the way of the future and will be disruptive, so if you want to get involved, do it now.”

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Copyright: sdecoret 

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and President & CEO ofIPWatchdog, Inc.. Gene founded IPWatchdog.com in 1999. Gene is also a principal lecturer in the PLI Patent Bar Review Course and Of Counsel to the law firm of Berenato & White, LLC. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Gene Quinn

Eileen McDermott is the Editor-in-Chief of IPWatchdog.com. Eileen is a veteran IP and legal journalist, and no stranger to the intellectual property world, having held editorial and managerial positions at several publications and industry organizations. She has acted as editorial consultant for the International Trademark Association (INTA), chiefly overseeing the editorial process for the Association’s twice-monthly newsletter, the INTA Bulletin. Eileen has also served as a freelance editor for the World Intellectual Property Organization (WIPO); as senior consulting editor for the Intellectual Property Owners Association (IPO) from 2015 to 2017; as Managing Editor and Editor-in-Chief at INTA from 2013 to 2016; and was Americas Editor for Managing Intellectual Property magazine from 2007 to 2013.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

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