A financial analyst has predicted that Apple will buy the small Swedish mobile manufacturer which claims to hold a prior patent on the 'swipe to unlock' technology used in the iPhone.
With patent peace talks between Apple and Samsung stalling late last week - both mobile giants continue to assert that the other is infringing on the other's patented technology in their smartphones and tablets - it's been suggested that a far smaller company could play a key role in the dispute.
Neonode, a small Swedish mobile company, filed a patent application for touch and glide touchscreen technology back in December 2002 - a technology that sounds eerily similar to the 'swipe to unlock' system used in the iPhone, and which predates Apple's patent filing by three years. (Neonode's patent was finally granted more than nine years later, on 10 January 2012.)
James Altucher, a financial analyst and trader, believes that Neonode's claim could prove key in the dispute between Apple and Samsung. His logic is that Apple is suing Samsung for violating its swipe patent, but that Neonode will weaken its claim with the prior patent filing. "Samsung has been holding up NEON's [Neonode's] patents as evidence that AAPL [Apple] did not invent the 'slide to unlock' feature," Altucher writes.
This video review of Neonode's N1m mobile handset, which came out shortly before the first iPhone, illustrates the touchscreen technology and its similarities to the iPhone interface.
Swiping from left to right is universally used as as 'yes' or 'accept' gesture on the N1m. And, as you will see if you fast-forward to around the 4-minute mark, it's used to unlock the phone too, just as you do with a locked iPhone.
So where can Apple go from here? Altucher's theory is that it will buy Neonode, the default solution of large companies when faced by smaller firms wielding intellectual property they like.
"I don't know if NEON is going to sue, but clearly at some point a license [licence] has to be worked out, plus a probable settlement for past use. You can't flaunt [flout] the law forever," he says.
"On this alone I think AAPL could buy NEON for up to 500% of its current price - $30."
Alternatively, he says, Neonode could press ahead in its own right and enjoy substantial success on the back of its "patent wins". (Neonode owns a number of patents in the e-reader space, for instance.)
Altucher thus predicts a hefty rise in Neonode's stock price.
"The stock is at $4.70 right now. I think it's a no-brainer buy up until $8-$10 (I own it) and I think it's an acquisition target up to $30. Even at $30 there is significant upside if the patents come fully to life or they reach monopolies in any other sector (mobile phones, cars, etc) as they have in the ereader space."
'Apple patent buyout': The case against
Many analysts (and a great number of online commenters) remain unconvinced. Patent law is complicated, and it is possible for two separate patents to be granted for seemingly very similar things. Apple was granted its patent in October 2011, which suggests that the patent office believes that technologies to be sufficiently different for two patents to be awarded.
One difference between the two technologies is that Neonode's is based on resistive display, whereas Apple uses a capacitive screen. Another difference - which Apple emphasised when the patent claims were examined in a Dutch court last year - is that Neonode's phone simply requires a gesture without displaying a moving object that follows the finger. But the Dutch judge rejected that argument.
One commenter on this page claimed that in some cases, companies have been known to file early "to get their foot in the door" and then revise their application as other companies come up with new, commercially successful ideas.
(It may be worth mentioning, finally - and, we would like to emphasise, without implying any duplicity whatsoever - that Altucher himself openly acknowledges, as you will see above, that he owns Neonode stock, and thus stands to benefit if the company's price rises.)