We know how Apple and Google are fierce rivals in the smartphone market. Not only are the iPhone and Android today’s dominant platforms, but Apple is likewise in bitter rivalry with Android phone manufacturers. Take for instance the Apple vs. Samsung case in which each firm is accusing the other of stealing design and technology ideas.
But court cases aside, even rivals can be friends when there is so much money at stake, and especially if it's intellectual property that's on the line. Apart from actual technology and innovation, patents can be important assets in today's fierce mobile market. Kodak's imaging patents are currently on the auction block, and whoever gets to acquire these strategic assets will be able to use the technologies to their advantage, either in their products or from licensing royalties.
Kodak expects to get at least $2.6 billion from the 1,100 or so patents, which will help the company pay back its investors and creditors in its Chapter 11 bankruptcy filing. However, bidders may have a bargaining chip. Google, Microsoft, Apple, Samsung, and other technology firms and patent-holding companies might partner with each other in acquiring these patents, thereby driving down the cost.
Kodak had been banking on aggressive bidding on its patents, like the much-hyped acquisition of Nortel Networks’ patents that fetched $4.5 billion. In that particular bidding, Google lost out to a consortium led by Apple and Microsoft. But after paying that hefty price, the companies involved are now more likely to befriend the competition rather than drive the price up.
For now, all of the bids submitted in the sealed auction are significantly below $500 million, sources cited by the Wall Street Journal say. “Bankruptcy makes for strange bedfellows among the bidders in Kodak's patent auction,” says an analyst for Brighton Securities. These even include Samsung, LG and HTC — Android smartphone manufacturers.
With disappointing initial results, though, Kodak says it might pull the patents from the auction block. The aim, after all, is to help the company survive its bankruptcy. Kodak says it is still in “active discussions” and has extended the auction in light of the turnout.