Apple Inc. (NASDAQ:AAPL) and Google Inc. (NASDAQ:GOOG) were involved in a not-so-secret secret conversation last week, as CEOs Tim Cook and Larry Page reportedly had a discussion regarding patents and a looming threat of infringement lawsuits in the future that might decimate both companies at the end of the day. With the stakes so high in terms of their respective market shares in various sectors of technology and late Apple Inc (NASDAQ:AAPL) CEO Steve Jobs’ desire for “thermonuclear” war on Google thanks to the Android operating system, there is a lot of uncertainty as to what was discussed in that conversation. Was it about existing patents or patents yet to be acquired, or both? And how would future patents be acquired?
Google Inc. (NASDAQ:GOOG) has had some interest in acquiring Vringo Inc. (NYSE:VRNG) in the past, as the company has a pretty stout legacy 3G portfolio that would prove valuable in the transition from 3G to 4G technology. But where did Vringo Inc. (NYSE:VRNG) get many of those patents? From Nokia Corporation (NYSE:NOK), which has on its own account a deep 4G patent portfolio in the tech industry, and has a current stock price that would make that company a very attractive acquisition for a company that might need some patent protection.
That is the basis of an interesting analysis of the Apple Inc (NASDAQ:AAPL) and Google rivalry, which may also be a partnership in the “common enemy” sort of way. all four companies just mentioned are postulated to be prominent in patent discussions and possible lawsuits in the coming months. Apple Inc. (NASDAQ:AAPL) has a patent loss to Nokia Corporation (NYSE:NOK) on its books, and has a win over Google Inc. (NASDAQ:GOOG) partner Samsung , but it appears that in the 3G and 4G patent universe, relative small fries like Vringo and Nokia Corporation (NYSE:NOK) seem to hold quite a few patent trump cards that, if either or both of these companies were acquired by the big fish in the pond, then e big fish would have nearly infallible patent protections moving forward.
The discussion featured here seems pretty complex and speculative, as the author admits that there is not very much chatter about any of the moves mentioned – other than Google Inc. (NASDAQ:GOOG) having previous interest in acquiring Vringo Inc. (NYSE:VRNG). One possible reason for the discussion by two supposed fierce rivals could be the alliance to face a common enemy – a lack of patent protection in the 3G and 4G space, in the wake of the annoucement that Samsung Electronics Co. Ltd. would sue Apple Inc. (NASDAQ:AAPL) for 4G LTE patent infringement (on the charge that because Apple iPads and iPhones would use the 4G LTE network, they would have to use Samsung patents to operate).
That lack of protection may be the reason that Vringo and Nokia Corporation (NYSE:NOK) may be in the crosshairs for both Apple Inc. (NASDAQ:AAPL) and Google Inc. (NASDAQ:GOOG). Apple’s most complete protection would be to get Vringo and Nokia, but it likely had to discuss Google’s plans for Vringo first. Will Google grab Vringo and thus force Apple to get Nokia for protection, or can Apple make a play for both? After all, Google doesn’t really need Nokia Corporation (NYSE:NOK) since it bought Motorola Mobility earlier this year and has that substantial portfolio.
It’s a fascinating discussion, and one that will certainly be watched closely by investors in each of the four companies – which includes hedge-fund managers like Julian Robertson of Tiger Management, Chase Coleman of Tiger Global Management LLC and Jim Simons of Renaissance Technologies, among others.
