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Intel acquires patent hoard from RealNetworks for $120 million. RealNetworks has announced that it has signed an agreement to sell a significant number of its patents and its next generation video codec software to Intel for a price of $120 million. RealNetworks is selling about 190 patents, 170 patent applications and its next-generation video encoding technology. However, RealNetworks will retain certain rights which will enable them to continue using the patents in their future products. According to Intel, the sale of the video codec software will help them deliver better video experiences on devices that use its chips. Further, Intel is entering the smartphone segment this year and now they can officially provide additional format support in their phones without having to pay royalties. They can also block potential rival smartphone makers from using these codecs, which will give them an upper hand in the market. Also, RealNetworks is planning to use these funds in developing new technologies. In addition to the sale of the patents and next-generation video codec software, RealNetworks and Intel signed a memorandum of understanding to collaborate on future support and development of the next-generation video codec software and related products.
Intel's software group has been steadily expanding over the years. However, the company is focussing more on behind-the-scenes software such as game engines and programming tools than on branded products which ordinary people use. It has also got a stake in the operating system market through its 2009 acquisition of Wind River, which among other things helps companies build devices with Google's Android operating system. Patents have, all of a sudden become more valuable with Android phone makers and other technology companies engaging in a multitude of patent wars right now.
Further, Thomas Nielsen, President and CEO of RealNetworks announced that selling these patents to Intel unlocked some of the substantial and unrealized value of RealNetworks assets. He also mentioned that this is an extraordinary opportunity for them to generate additional capital to boost investments in new businesses and markets while still protecting their existing business. On the other side, Renee James, general manager of Intel's Software and Services Group, said that they believe this agreement will enhance their ability to offer richer experiences and innovative solutions to end users across a wide spectrum of devices, including Ultrabook devices, smartphones, and digital media. The deal certainly looks like a win-win for the two companies.
Intel's software group has been steadily expanding over the years. However, the company is focussing more on behind-the-scenes software such as game engines and programming tools than on branded products which ordinary people use. It has also got a stake in the operating system market through its 2009 acquisition of Wind River, which among other things helps companies build devices with Google's Android operating system. Patents have, all of a sudden become more valuable with Android phone makers and other technology companies engaging in a multitude of patent wars right now.
Further, Thomas Nielsen, President and CEO of RealNetworks announced that selling these patents to Intel unlocked some of the substantial and unrealized value of RealNetworks assets. He also mentioned that this is an extraordinary opportunity for them to generate additional capital to boost investments in new businesses and markets while still protecting their existing business. On the other side, Renee James, general manager of Intel's Software and Services Group, said that they believe this agreement will enhance their ability to offer richer experiences and innovative solutions to end users across a wide spectrum of devices, including Ultrabook devices, smartphones, and digital media. The deal certainly looks like a win-win for the two companies.
Author: Taruni Suresh
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