When the final pieces of Nortel’s patent portfolio were sold off this past summer, the $4.5 billion price tag surprised many observers. The collection of more than 6,000 patents covered au courant areas of wireless and LTE, optical, voice and internet.
For the acquirers, a consortium that consisted of RIM, Apple, Sony and Microsoft, the patents were, at least in part, a defense mechanism in an increasingly litigious environment for intellectual property
Nortel, “hit a wall” that was the financial crisis of late 2008 early 2009, said CEO Mike Zafirovski when he went to Ottawa looking for a bailout. That idea that was ultimately rebuffed when then Industry Minister Tony Clement said there was no role for the Canadian government in the company’s affairs.
The poor timing of the end of Nortel’s demise and subsequent revival as “organ donor” to the wireless industry; Nortel’s technology can be found in every iPhone, BlackBerry and Android, begs the question: Could Nortel have made it as a company?
Fellow Ottawa-based companies WiLAN (TSX:WIN) and Mosaid (TSX:MSD) are proving, at least on a certain scale, that the current business environment can support a company based almost purely on defending a large portfolio of patents. But there was, of course, much more to Nortel than patents. Nortel manufactured and sold gobs of routers, VoIP PBX Systems, switches, and business phones. What many don’t know is that, in 1998, the company actually manufactured and began to market a wireless device that bears a startling resemblance to today’s smartphones.
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The Nortel Orbitor, sometimes spelled Orbiter, was a project that was developed by a small collection of engineers at Nortel called the Corporate Design Group. It was ultimately quashed by then CEO John Roth because, as he told the Ottawa Citizen in 2007, Roth felt the company didn’t have expertise in consumer products and could not make the device cost competitive.
A whitepaper released several years later for The National Research Council by Nortel’s André Vellino ran down the specs of the device. The Orbitor would have a PDA LCD display and a Pen/Keyboard Input, HyperLink HTML-based GUI Model, Java Support from Real-Time OS, and high-quality digital sound. The paper lists the many potential benefits to mobile users, once the device is implemented with “mobile agents”. These include an “E-mail Organizer” “Utility Billing Applets and Electronic Banking”, “Audio on demand (e.g. CBC News on WWW)” “White Pages / Yellow Pages Search-and-Dial Service” and a “Real-Estate location service”. None of these features would be unfamiliar to users of Apple’s App Store.
And The Orbitor was not just some concept that was pre-destined to gather dust in a shoproom shelf. As an early 1998 article from UK tech site V3 shows that early that year Nortel demonstrated the mobile handset at the GSM World Congress in Cannes, France. Ken Blakeslee, who led the Orbitor team, was convinced the device would make it to market. He told the Ottawa Citizen “We had 80 finished units going into market and service delivery trials with CellNet (now O2 Telefonica) in 1998.”
But is the resemblance between the iPhone and Orbitor just a coincidence? Maybe not, says Peter Bernstein, senior editor with tech site TMCNet. Bernstein notes that the developer of Orbitor’s user interface was Don Lindsay, who left Nortel in 2004 to join Apple. Lindsay, he points out, went on to form a team at Apple that created the user interface for the iPhone.