I know what you’re thinking: why would RIM want to buy Nortel’s Wireless Unit? In today’s world, when a company invents something, they patent the hell out of it and charge other companies who want to use their technology a small fee. Nokia, Ericsson, Motorola, Qualcomm, they all have a lot of intellectual property (IP) when it comes to wireless technology. RIM has none. As in zero. RIM does not need Nortel’s Wireless Units because they have hopes and aspirations to build a network one of these days, they want the wireless unit because they need their CDMA and LTE IP. An analyst I spoke to a while back explained how IP works in the wireless industry. Company A goes to company B and says “I have XYZ number of patents and I want your technology.” Company B says “Nice, but I have XYZ + 1 number of patents, so instead of charging you N, I’ll charge you N -1, and I want a little bit of your technology as well.” A deal is done behind closed doors that both parties can agree on and everyone leaves happy. RIM is the fat slow rich kid in grade school who all the strong kids beat up so they could steal his lunch money, which is why they wanted to buy Nortel’s Wireless Unit for $1.1 billion, a substantial increase over Nokia’s offer of $650 million. Part of the deal, if RIM purchased the wireless unit, was that it would not submit offers for other Nortel assets for 1 year. For some strange reason, instead of taking the money, Nortel said “RIM refused to comply with the court approved procedures,” but that it is “willing to provide RIM with the opportunity to participate in the auction” for the wireless assets. I’m sure there are quite a few shareholders who are angry as all hell about all of this. I know I would be.
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