In the name of business, your enemy today might be your friend tomorrow, if you both can work out a mutually beneficial deal. In line with this, Google and Apple — supposedly arch-rivals in the mobile operating system field — are teaming up to secure a big patent portfolio that Kodak is setting up for grabs.
We reported on this news a few months back, in line with Kodak's Chapter 11 bankruptcy filing. Back then, Kodak had been hoping to fetch at least $2.6 billion from its patent auction, although it did not get sufficient bids during its first call for proposals. What had been interesting to note was that rival companies were trying to come together in order to bring down the asking price of Kodak.
Simply put, if companies competed for the intellectual property, then Kodak is likely to price its portfolio higher. But if companies were to combine together, then they will have a better negotiating position, which will bring the price down.
In recent news, Google and Apple are reported to have combined their efforts in order to make a $500 million bid for the patent portfolio. There is no official confirmation from either company, although sources have actually reported conflicting news. First, sources reported that Google and Apple are each forming their own consortiums to rival each other's bids. But now, a different set of sources cited by Bloomberg say the two Internet and tech giants are teaming up.
The patent business is a lucrative one, with firms being able to get hefty licensing fees from competitors using their technologies. Kodak is hoping it could get enough cash to help it get by its financial troubles, while Google and Apple want to be able to use these imaging technologies in their devices and license these out to competitors. As such, keeping the price as low as possible would be in the best interest of both.
Companies have learned from their past mistake of over-bidding on patents, such as the $4.5 billion acquisition of Nortel Networks' patents by a group led by Apple and Microsoft. As such, is the Apple-Google team-up a smart one?