Apple (AAPL) Will Strike Back at Google (GOOG) With an Acquisition of Nokia (NOK), InterDigital (IDCC) or RIM (RIMM) - Analyst
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Price: $167.04 -0.57%
Rating Summary:
39 Buy, 25 Hold, 7 Sell
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Today's Overall Ratings:
Up: 7 | Down: 10 | New: 5
Rating Summary:
39 Buy, 25 Hold, 7 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 7 | Down: 10 | New: 5
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Apple (NASDAQ: AAPL) will likely respond to Google's (Nasdaq: GOOG) acquisition of Motorola Mobility Holdings (NYSE: MMI) with its own acquisition, analyst Peter Misek at Jefferies believes.
Misek said the Google/MMI deal has significantly reduced Apple's ability to pressure the Android ecosystem as MMI had the broadest and deepest patent portfolio amongst the wireless players. "We believe AAPL's large cash position gives it significant flexibility to respond with its own acquisition," he said.
Apple will likely focus on wireless patents that are truly essential and part of the standards, Misek said. Potential takeover targets for Apple includes Nokia (NYSE: NOK), InterDigital (Nasdaq: IDCC) and Research in Motion (Nasdaq: RIMM), he states.
On Nokia, Misek said, "We believe AAPL is a licensee of NOK and pays significant royalties for cross-licensing. We believe NOK likely has at least 50 essential 4G patents and likely over 100 essential 3G patents."
On InterDigital, Misek said, "GOOG opted for MMI's patent portfolio instead of IDCC's, which provides an upper-bound for the value of IDCC's patents. But due to the many cross-licensing arrangements and low royalties on some of the patents, it is difficult to gain further clarity on the value of those patents. AAPL or another player may be interested but pricing will be key."
On RIM, he said, "By our calculation RIM spent over $5B in acquiring and developing its patent portfolio. While RIM has critical security related patents and a unique NOC and Node system, we believe RIM's patent portfolio may be more difficult to value as a stand-alone asset due to its many acquisitions."
For more ratings news on Apple click here and for the rating history of Apple click here.
Misek said the Google/MMI deal has significantly reduced Apple's ability to pressure the Android ecosystem as MMI had the broadest and deepest patent portfolio amongst the wireless players. "We believe AAPL's large cash position gives it significant flexibility to respond with its own acquisition," he said.
Apple will likely focus on wireless patents that are truly essential and part of the standards, Misek said. Potential takeover targets for Apple includes Nokia (NYSE: NOK), InterDigital (Nasdaq: IDCC) and Research in Motion (Nasdaq: RIMM), he states.
On Nokia, Misek said, "We believe AAPL is a licensee of NOK and pays significant royalties for cross-licensing. We believe NOK likely has at least 50 essential 4G patents and likely over 100 essential 3G patents."
On InterDigital, Misek said, "GOOG opted for MMI's patent portfolio instead of IDCC's, which provides an upper-bound for the value of IDCC's patents. But due to the many cross-licensing arrangements and low royalties on some of the patents, it is difficult to gain further clarity on the value of those patents. AAPL or another player may be interested but pricing will be key."
On RIM, he said, "By our calculation RIM spent over $5B in acquiring and developing its patent portfolio. While RIM has critical security related patents and a unique NOC and Node system, we believe RIM's patent portfolio may be more difficult to value as a stand-alone asset due to its many acquisitions."
For more ratings news on Apple click here and for the rating history of Apple click here.
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