Friday, January 11, 2013

Amazon: Acacia Suit Means ‘Fire’ Will Be Big, Says Nomura

Following reports yesterday that Amazon.com (AMZN) is being sued by an outfit called Smartphone Technologies LLC, Nomura Equity Research’s Richard Windsor this morning writes that the suit is proof that Amazon’s “Kindle Fire” tablet computer will be “a very relevant entrant to the tablet market.”

Jeff Roberts of PaidContent yesterday reported that Smartphone, which is owned by Acacia Research, which pursues many patent suits, has accused Amazon of infringing Smartphone’s technology in the Fire. Nomura’s Windsor notes that as the Fire is not due out till the November 15th, the only possible thing Acacia/Smartphone could be going after this quickly is the “Android” operating system software running the device, provided by Google (GOOG), of course.

Windsor opines this is like scraping the bottom of the barrel for patent winnings: “The game [of intellectual property] is largely over in Android, but that is not going to stop those seeking to make an easy return from having a go” at suing, he writes.

Windsor expects Google will step in to help defend Amazon if need be. Be that as it may, Windsor thinks the main point of Acacia’s suing is that it indicates Acacia believes the volume shipments for the Fire will be big.

Windsor concludes, “Success of the Amazon Kindle Fire is likely to place pricing pressure on the other vendors to reduce their prices and their margin aspirations, in our view,” which is a “small negative for Samsung [Electronics (SSNLF) and HTC (2498TW), but more relevant for Motorola [Mobility] (MMI).”

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