A Blog by Jonathan Low


Aug 25, 2013

Why Google Bought - and Foxconn Sold - the Chinese Manufacturer's Wearable Display Patents

You can hardly google the word Google these days without being faced with an image of the newest, new thing, Google Glasses. That they are prototypes and not widely available makes them all the more desirable, even if most people, including industry analysts, are not exactly sure what they can or will do.

That mystery makes them all the more enticing is like the annual guessing game around what Apple's annual iPhone introduction will feature. It hardly matters: the anticipation is breathless and the reality, when it arrives, will be an afterthought for all that.

So, the twinning of the brand with the product makes Google's patent purchase less a curiosity than a strategic imperative. Clear the field, pay what you must to avoid unpleasantness and perhaps make a useful ally in the process - all while tweaking Apple, one of your most fearsome competitors, whose lackey and most important supplier Foxconn has been.

For Foxconn, this sale serves several purposes. First, Foxconn has been making noises about shedding its role as Tonto to Apple's Lone Ranger for some time. Foxconn believes it has capabilities for which it has not been properly compensated by global financial markets. The constant pressure not to abuse employees while Apple appears to skip off without censure must also be grating to Foxconn management. The wearable display patent sale to Google establishes the potential for another important customer, especially as questions about Apple's future as technology's Innovator-in-Chief abound.

Some might read into this that Foxconn, having more than average access to Apple's future plans, sees the wisdom in diversifying its customer base. However, it is also quite possible that Foxconn alerted Apple to the sale, if not exactly asking permission. There is no point in alienating your most important customer before you need to do so. Ulltimately, the benefits to Foxconn of selling to Google are greater than those of thwarting them - which, in itself, is a statement about the state of play in the tech industry's competitive set. JL

Neil McAllister reports in The Register:

Google has snapped up a parcel of patents from Hon Hai Precision Industry, the Taiwanese electronic manufacturer more commonly known as Foxconn, in a move seemingly designed to bolster its Glass headsets against potential competitors.
In a statement obtained by The Wall Street Journal, Hon Hai described the patents sold to the Chocolate Factory as "Head Mounted Technology" that can create virtual images "superimposed on a real-world view."
No further details were revealed, and the price of the sale was not disclosed.
Hon Hai said it doesn't know whether Google plans to use the patents for Glass, adding that the patents are "commonly used in aviation and tactical/ground displays, engineering and scientific design applications, gaming and video devices as well as training and simulation tools."
If protecting Glass is the goal, however (and it seems likely), this wouldn't be the first move Google has made to shore up its portfolio of wearable-computing tech. In July, the web advertising giant bought a 6.3 per cent stake in Taiwanese chip designer Himax Display, which produces components for Sergey Brin's high-tech headsets.
Similarly, Foxconn is widely believed to be the frontrunner to build Glass for Google – possibly in a new, stateside facility in Santa Clara, California – but Hon Hai chairman Terry Gou has dismissed such reports as "speculative."
Google buying up Foxconn's patents could strengthen the relationship between the two companies, but it could also make it easier for Google to take Glass to any number of other manufacturing partners without being stung by intellectual property issues.
The patents could also be used to swat away would-be Glass competitors. Chinese search firm Baidu is reportedly planning to horn in on Google's action, as is Meta, a startup founded by Columbia University neuroscience researchers that has recruited Canadian wearable-computing guru Steve Mann to help develop a commercial augmented-reality headset.
Or the move could be purely defensive. Glass is currently only available in a limited "Explorer Edition" intended for developers and wearable-computing enthusiasts, but Mountain View is expected to release a version for the general public in 2014. By building up its wearable-computing patent war chest now, Google may be hoping to avoid the seemingly never-ending patent battles that have plagued its Android business.
Google did not immediately respond to The Reg's request for comment.


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