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Technology Stocks : Interdigital Communication(IDCC)
IDCC 345.78-2.5%3:59 PM EST
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To: D.J.Smyth who wrote (3732)2/3/2000 3:09:00 PM
From: D.J.Smyth  Read Replies (3) of 5195
 
just to do some simple calculations Molly: if you consider that (a) 800 million TDMA/GSM/PDC based phones have been sold to date, (b) IDC has received about $300 million in up-front payments and re-occuring licensing fees, and (c) IDC's revenue base of that $300 million came from less than 12% of all past TDMA sales, then you can partially conclude the following:

(a) 12% of 800 million phones sold at an average price of $55 (to the retailer - retailer mark-up is another 80%) is $5.3 billion. This $5.3 billion represents 96 million TDMA based phones. $300 million/96 million phones = $3.13 a phone which includes a write up for both infra and phone structure technology (the actual numbers are higher - but this is an example only).

(b) $3.13 a phone isn't a sneeze if you consider they are owed dollars on the remaining 88%. ERICY represented about 36% of all past TDMA sales at one time (not now, NOK has taken over that role - some of ERICY sales were to AT&T, so there is some overlap in the past in including T in that number), MOT about 23%, NOK 19%, all others 22%.

(c) The average per phone actually includes payment on infrastructure which is higher; payment per phone is lower.

Again, these are justifable estimates; not the actual numbers.

Now that the "upfront payments" from vendors has been eaten through, IDC's reocurring royalties are beginning to kick in.
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