Five New Patents For Skyhook

Skyhook Wireless, which makes location-tracking software used in smart phones and other mobile devices, announced today that it has been granted five new patents to go along with the eleven it already has. The announcement comes days Apple Inc. revealed that it was no longer using the Boston-based company’s technology in its new products, including the five-week-old iPhone 4.

The patents, which were all granted within the last month, could prove crucial to Skyhook’s ability to deal with increased competition in the coming years, or to possibly force would-be competitors to license its technology rather than face lawsuits.

Apple’s decision to rely on its own database of WiFi hotspots rather than Skyhook’s isn’t likely to have an immediate financial impact on the company, say two people familiar with Skyhook’s dealings with Apple. The people, who both requested anonymity because they did not have approval from the companies to comment, say they believe Apple will continue to pay Skyhook through the end of a long-term contract first agreed upon before the iPhone was introduced in 2007, as if it was still using Skyhook’s technology.

This might explain the riddle suggested by public comments made by Apple and Skyhook. While Apple spokeswoman Natalie Kerris confirms that “we’re not using Skyhook technology anymore,” Skyhook CEO Ted Morgan tells Bloomberg Businessweek that Apple “remains a customer of the company.”

Still, Apple is one of the Skyhook’s largest and best known customers, and was a primary growth opportunity given Apple’s rising market share in key mobile device markets. And Skyhook faces potential long-term competition winning business from the other camp that’s gaining share: devices built around Google Inc’s Android mobile software platform. That’s because Google offers its own location-tracking technology to Android licensees. While Skyhook announced contracts with Android licensees Motorola in April and Samsung in July, these and other Android licensees may opt to use Google’s homegrown technology in the future. One reason is price. While Skyhook’s revenues come from the sale of its technology to handset makers, Google doesn’t charge extra for its location service, say two people familiar with the market.

Faced with such competition, Skyhook may need to increasingly rely on its patents to maintain, or protect, any lead in innovation. While Skyhook was the first to send electronics-laden cars out to record the location of Wifi hotspots throughout the United States, Google now has its own fleet of cars, both in the US and abroad. Also like Skyhook, Google makes software that can be embedded into mobile devices; that way, the devices can ascertain their precise location relative to their distance from hotspots listed in the database. (Handsets also use coordinates obtained from GPS satellites and cell towers, but Wifi hotspots tend to be more accurate in crowded urban areas or inside homes and office buildings).

Read the original story at BusinessWeek Byte of the Apple Blog