Steven Jobs Tells of Accord Between Next Inc. and IBM
Steven P. Jobs revealed Monday that International Business Machines and his small, 4 1/2-year-old computer company, Next Inc., quietly entered into a sweeping licensing agreement late last year covering all patents held by both companies.
The deal, which also covers any patent issued to either company over the next five years, means that neither company will be considered in violation of patents by using technology developed by the other. But it doesn’t rule out future licensing fees to be paid by either party.
The agreement is considered a coup for Jobs because Next is a young company still fighting to establish itself in the market and, according to Jobs, his firm was not required to make any immediate cash payment to IBM. The deal is also ironic given Jobs’ past animosity toward IBM while he was head of archrival Apple Computer.
“This is incredibly important to us,” Jobs said, noting that IBM has required payments of $100-million-plus for similar deals with other high-technology companies. Although IBM refused to reveal details of the agreement, it confirmed that a deal had been struck with Next.
Jobs, 35, Apple Computer’s co-founder who was ousted from the top job at that company, said the licensing agreement also underscored the growing ties between IBM and his company and said it “was a reasonable conclusion” that the relationship would become closer.
Analysts said the agreement gives Jobs additional credibility and access to technology that would otherwise be unavailable.
“It’s potentially significant given Steve’s ability to find gems where others have seen dross,” said Richard Shaffer, a high technology newsletter publisher.
Separately, IBM and Next confirmed Monday that the world’s largest computer maker would begin including the NextStep software developed by Next with two of its high-end personal computer models. The products, which had been widely expected for the last six months, are expected to hit the market sometime this summer.
NextStep is a graphic display system that makes it easier for users to operate a personal computer as well as to write software programs.
Jobs, who has been struggling for months to spur sales of his own personal computer system, said the software deal with IBM should boost his efforts by creating demand for new software programs that can run on both the IBM models as well as his own.
Analysts have repeatedly said that for Jobs to successfully launch his new machine, there must be an ample library of software programs available to customers. Without them, the sleek, black, $10,000 machine will have little practical applications.
“The pie will get bigger, and our share will be larger,” Jobs said of IBM’s use of NextStep.
