Intel to Buy 1,700 InterDigital Patents for $375M

The tussle for domination in the wireless communications market intensifies today with an announcement from {complink 2657|Intel Corp.} that it has agreed to purchase about 1,700 “patents and patent applications” related to key technologies in the segment from intellectual property developer {complink 2677|InterDigital Communications Corp.}.

Intel, the world's No. 1 semiconductor vendor by sales, said it will pay $375 million for the portfolio, which the companies in a statement said is “related to 3G, LTE and 802.11 technologies.”

In the statement, InterDigital described itself as “an active developer of advanced wireless technologies including WCDMA (Wideband CDMA), HSDPA (High Speed Download Packet Access) and HSUPA (High Speed Upload Packet Access) 3G technologies as well as LTE (Long Term Evolution) and LTE-Advanced 4G technologies.” These technologies form the core of latest advances in wireless communication and are being deployed across multiple platforms in handsets and tablet computing.

InterDigital gains validation of its business model with the transaction and secures additional cash resources to finance R&D efforts in other market segments. Its stock price shot up almost 30 percent on the news to $29.40 from the closing price of $22.88 on Friday, boosting the market value to $1.3 billion.

InterDigital said the sales are a part of its plans to broaden operations “to include patent sales, licensing partnerships and other possibilities,” according to Scott McQuilkin, senior executive vice president, strategy and finance at InterDigital, in the published statement.

The company had been seeking to sell itself but failed previously to secure a buyer due to stagnating sales and declining profits. It has now evolved that strategy to include a piecemeal sale of assets and the Intel transaction represent a validation of the new focus. InterDigital said it still has other IP portfolios available for sale. The assets being acquired by Intel involve “a small portion of our overall portfolio,” McQuilkin said.

This transaction adds to the IP resources Intel has amassed as it forges ahead with plans to play a bigger role in the wireless communications market, an area where the company has in the past poured massive amounts of money via acquisitions. It is expected that the InterDigital deal will strengthen its position in the smartphone and tablet PC markets where Intel has been seeking a role for years but only succeeded in scoring recent design wins with wireless handset vendors.

“These patents will support Intel's strategic investments in the mobile segment,” said Doug Melamed, Intel senior vice president and General Counsel. “The addition of these patents expands our already large, strong and diverse portfolio of intellectual property.”

5 comments on “Intel to Buy 1,700 InterDigital Patents for $375M

  1. Wale Bakare
    June 20, 2012

    These technologies form the core of latest advances in wireless communication and are being deployed across multiple platforms in handsets and tablet computing.

    This a nice move by Intel, capturing these technologies would indeed make Intel stay ahead in field of semiconductor.

  2. Clairvoyant
    June 20, 2012

    That is quite the purchase! It may help Intel to advance even further and grow larger in the marketplace.

  3. Eldredge
    June 20, 2012

    $375 million seems like a hefty sum, considering the IP is a combination of patents and filings that haven't issued as patents. That averages out to $220k per patent and patent application. They must have some technology that Intel is keenly interested in.

  4. Himanshugupta
    June 21, 2012

    this average is far below to what IBM got last year and this year for the patents of sales to google and FB. The average was around 1million so you can image the benefits of building a large portifolio.

  5. Eldredge
    June 21, 2012

    From that perspective, it sounds like they got a very good deal.

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