Boston, MA 03/21/2014 (wallstreetpr) – Unwired Planet Inc (NASDAQ:UPIP) has added Lenovo Group to its long list of technology customers. The company signed 21 patents related to 3G and LTE mobile technologies to Lenovo for $100 million. The transaction is expected to close in the next couple of weeks.
Unwired acquires and licenses wireless communication technologies mostly to Internet devices makers. The company owns more than 2,500 issued and pending U.S. and international patents. The company serves many device manufacturers around the world with its technology which have been at the forefront of changing how people communicate.
Shares of Unwired jumped more than 60 percent by early afternoon Friday on the news that it had signed a big business deal with Lenovo. Share of the company traded between $1.26 and $2.39 in the past 12-month duration.
Lenovo deal and what it means
Lenovo is billed as the largest PC maker of the world. But there have been little to celebrate about in the PC industry. Sales of PC have dropped in many markets and more drops in the segment have been predicted. This has left PC makers and PC components suppliers like Intel Corporation (NASDAQ:INTC) staring at reduced revenues and widening costs of business.
It now seems that Lenovo which has been seeking its luck in Internet devices market – smartphone and tablet – is on an all-out war to take a forceful entry into the market. But entering a market that is dominated by forces such as Apple Inc (NASDAQ:AAPL), Samsung and HTC requires adequate preparation and this could be the reason the company has decided to put its $100 million cash into technology acquisition.
Choosing a deal with Unwired Planet Inc (NASDAQ:UPIP) which is not involved in device manufacturing business seems to be a clever strategy by Lenovo to ensure that it bypasses deals with rivals which might lead to conflict of interest. Apple Inc. (NASDAQ:AAPL) and Samsung own significant amount of patents in mobile technology.
Purchase of Motorola
The 21 mobile patents deal with Unwired Planet Inc (NASDAQ:UPIP) comes on the back of Lenovo’s acquisition of Motorola Mobility from Internet giant Google Inc (NASDAQ:GOOG). Lenovo paid a whopping $2.91 billion to purchase the loss-making Motorola, hoping that it will be able to integrate it into its mobile business.
The patent deal with Unwired Planet Inc (NASDAQ:UPIP) will enable Lenovo to speed up the development and launch of its mobile devices so that it can take advantage of the prevailing market opportunities. This deal with Unwired will also save Lenovo a great deal of money that would have gone into research and development of its own technology.
