Intel has entered into a deal to buy a significant number of patents and next generation video codec software from RealNetworks for $120 million. As part of the deal RealNetworks will retain select rights to continue to use the patents in current and future products.
The deal includes the sale of the approximately 190 patents and 170 patent applications and next generation video codec software. In addition the two have signed a memorandum of understanding to collaborate on future support and development of the next-generation video codec software and related products
RealNetworks said that the sale will not materially alter its expectations for future sales and that it would use the funds from the deal to invest in new businesses and markets while also retaining its existing markets.
It is pretty obvious where Intel sees this technology going-it has been working feverishly to get its technology adopted in the smartphone and tablet space, and is seeking to enhance its notebook presence by working with partners to develop a new very slim category that it calls ultrabooks.
Renee James, Intel senior vice president and general manager of the Software and Services Group said in a release that “We believe this agreement enhances our ability to continue to offer richer experiences and innovative solutions to end users across a wide spectrum of devices, including through Ultrabook devices, smartphones and digital media.”
Intel has always been a strong advocate of investing in technology in good times and bad. During the Dot.Com bust it continued to heavily fund its massive research and development efforts, one of the biggest in the world.
It currently spends in excess of $6 billion annually in R&D and has labs around the world doing research not just in semiconductors but a surprising range of other activities as well including studying the habits of tech users to see how and why they use products.
But the company has also used its strong financial position to use cash as a form of R&D, purchasing companies and technologies that it sees as either important to it as a key competency or as an investment that can enable it to participate in new markets if they emerge.
Buying technology and even developing new technology is only one step. The seamless integration of that technology into core products, or passing it on to others to us in conjunction with Intel developed products is the next step.
It had once gone on a huge buying spree in the communications market only to sell off assets at pennies on the dollar. I expect that Intel has learned quite a bit from that experience a decade ago and will put that to good use.
Also in favor of a smooth integration of the acquired technology is the fact that RealNetworks is not just some startup that has ‘gee whiz’ technology but an established player with technology that Intel is no doubt very familiar with.
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