edamo, ot
two reasons Rahm has missed the boat
a) Rahm, the "only" analyst is a retail stock analyst and not a telecom analyst. Morgan Keagan is a relatively small firm that doesn't have an inhouse specific telecom analyst (you should offer to manage their $80 million in return for full coverage - Rahm hasn't done a superb job - he's underestimated their earnings every year he's covered them by at least 40% each year); but nevertheless MK gets the job of "managing" IDC's $80 million in cash because they are covering IDC; how quaint huh?
(b) secondly Rahm has, in the past, publically complained that IDC hasn't afforded him or others (tis true) TDMA renewal numbers going forward; but has now stated that IDC will be giving him detailed renewal numbers this week or next (he may have them now - one reason for it being up today?). A more recent NYC hedge fund (last week) was told by CFO that renewals will be in the range of $14 to $16 mil next year (upfront payments are now used up and per phone payments come on line) counting basic TDMA growth (BUT this $14 to $16 from the CFO was given before NEC announced they were dropping CDMA plans in U.S. and going fully with TDMA - NEC is an IDC licensee whose upfront payment has expired, so per phone sales are now being paid along with Hughes, et. al. outside of Japan), coming from about 9 of the 20 licensees (remaining 11 come on line later in 2000) - they are looking for another 40 delinquent TDMA licensees going forward over the next two years as they obviously believe their case against ERICY is strong (Fulbright and Jawrorski out of Texas are attornies resenting them - and, of course, some current licensee agreements are bumped up when/if they win ERICY). As to why other telecom analyst havn't picked up on it - 98% bias due primarily to IDC secretive manner in which IDC has released info (same complaint as Rahm) - but by Rahm's own words, IDC is meeting with him in the next week to give him and others a clear picture. Oddly enough $14 mil in licensings revenue and the additional $20 million payment from NOK (as approximate due per contract) would equal $.51 in earnings. So he arrives at a "guaranteed" earnings of $.51, which doesn't count any settlement or further licening deals.
Technically, IDC's earnings have been increasing over time, graph wise when averaging in up-front payments (lump sum payments)
As for Qcom/IDC patents being the same,
A complicated subject. Nokia signed a 3g agreement with IDC to assist them in developing their 3g project. IDC has been working on patenting 3g systems since 1990 - broadband CDMA designs, both fixed and mobile. They had a fixed system running in six locations, on in the U.S.; but decided that the move toward the combined fixed/mobile universe of 3g was more important than spending dollars to finance the fixed only.
Qcom has reportedly a stranglehold on (a) power control patents and (b) handoff, which are both unique to narrowband and broadband. However, given the increased power requirements for W-CDMA (as opposed to Q's narrowband Is-95), it is improbable that Qcom's power patents can be equally applied in the wideband arena (as IS-95 requires much less power requirements in 1.25mghz as it does in high mghz transmissions) as it is in the narrowband. NOK has worked with IDC's relative power patents in applying them to to the wideband or mobile broadband CDMA deal. NTT is also working with NOK in this manner.
As for handoff; Clark Hare on the Qcom thread is fully versed in this particular Qcom patent. In fact, former IDC employees, now working at Qcom, were instrumental in helping Q achieve this milestone. IDC does claim in their patent data several unique wideband mobile handoff formats (Qcom, according to a very prominent 3g ITU participant [from another company other than Qcom or IDC] is using IDC's pilot control patents - which apply to IS-95, but not to W-CDMA, so Q will need to make an agreement - along with NTT, et. al, to utilize the pilot control for wideband applications if they so chose).
But, more importantly than both these, according to both NOK, IDC and a few others, is the GSM to W-CDMA interface - this is primarily why, it is believed, IDC and NOK married. IDC has the most effective interface available, Qcom doesn't have it (and supposedly this is why Qcom stated in their last conference that they were searching to establish a relationship with a "major" GSM patent player - there is a major player who claims most of the GSM cards - IDC), NOK didn't have it (or didn't prior to IDC - and suddenly after the IDC agreement they announce the interface to WCDMA). GSM and TDMA combined control 85% of the digital market. The interface from GSM/TDMA to Wideband CDMA will play a primary key. If you read IDC's last news release the interface is mentioned.
As Italia Telecom stated in Europe (they are the largest mobile operator in Europe to which NOK sells) - it is very improbable they will move from GSM to CDMA to W-CDMA. They want to jump directly and bi-modally from GSM to W-CDMA (2G to 3g). It is reported that ERICY is having difficulty with GPRS (an intermediate step from GSM to W-CDMA) as they don't have the unique GSM interface patent which allows smooth transition which IDC contains. Then you come back to the lawsuit ERICY with IDC; are they too proud to come to terms to get GPRS to function at full capacity?
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