Thanks to Sixofsix2. TDMA, CDMA. TDD, FDD. And it looks like we have a pragmatic guy from Motorola on top of all that now.
From InterDigital's New CEO, Two Days into the Job
Some lessons Mark Gercenstein learned at Iridium: "No wishful thinking. No ignoring the marketplace. Total open communication"
Robert Barker covers personal finance for Business Week
Earlier this week -- and less than two full days in his new position as chief executive at InterDigital Communications (IDC) -- Mark Gercenstein paused between meetings with employees to chat with me by phone from the company's research plant in Melville, N.Y. A veteran of Motorola (MOT), Gercenstein hopes to lead the King of Prussia (Pa.)-based InterDigital, which has faltered in the past, toward fast growth in sales and earnings on the basis of its technical knowhow in wireless communications (see "Is InterDigital the Qualcomm Hardly Anybody Notices?").
Here are edited excerpts from our discussion:
Q: What's the opportunity here?
A: First of all, I like the fact that InterDigital's size is rather small compared to Motorola. It's very entrepreneurial. It's on the cutting-edge of technology. It has a very dedicated core of management and professionals who are probably recognized as some of the leading experts in the field. In terms of the opportunity itself, it became very obvious to me that InterDigital could play a very significant role in this convergence of Internet and wireless access.
Q: The wireless Web?
A: I'm not suggesting that people will be driving their cars and downloading Web sites, but in terms of having access to all the information that's stored on the Internet using wireless devices, that is really the objective and the goal of third-generation [so-called 3G wireless technology]. I believe that we haven't even tapped the ultimate potential of what this could mean in terms of the kind of services that operators can offer to their customers and how this technology and [these] products can be used.
Q: As you're aware, there's a contingent of investors who believe that IDC is the next Qualcomm (QCOM). How do you assess that expectation?
A: I happen to believe that there's a lot of optimism for comparing us to Qualcomm. I'm not an expert on Qualcomm, but I think that Qualcomm chose certain technologies which were very appropriate for growth in the mid-80s, when cellular exploded. They were focused on wireless transmission of voice, so they focused on narrowband CDMA [code division multiple access] technology that was applicable to this. They were able influence a lot of the standards and manufacturers, which obviously led to success.
InterDigital took a different path. It focused on wideband and then broadband technology, which really didn't find its niche until several years ago, when, literally, the Internet became an everyday phenomenon. So one could optimistically draw a parallel there. I would not want to presume today to compare us to Qualcomm, because of their obvious success in the marketplace, their size, and everything else. But it's clearly an objective to shoot for.
Q: As you look at the company now and assess the talent, the patents, the technology, and the marketplace, when do you think investors will see meaningful new sales and earnings from 3G products?
A: I'm going to answer you, but I think I can give you a better-quality answer after I've been in the job for more than a day and a half.
Q: O.K. Shoot.
A: I think that certainly in the next 18 to 24 months [we] will provide some very tangible results.
Q: InterDigital has a development agreement with Nokia (NOK). Did you talk with Nokia before taking this job?
A: No, I did not. I was with Motorola, and that would not be viewed very nicely. I just didn't feel it was appropriate for me to do that. It is one of the things that I intend to do very shortly, after I get enough knowledge so that I can conduct a meaningful meeting. But at this point in time, I will make it my priority to meet with Nokia and any other potential customers.
Q: Having worked for many years at Iridium, which failed, did that create difficulties in interviewing for this new job?
A: It was certainly a topic of discussion. I have to tell you that the experiences that I gained from that were very valuable. And in fact, that is exactly how the board of directors at InterDigital interpreted it as well. They felt that somebody who had lived through successes and failures has a perhaps broader perception on how things are going and how to avoid certain mistakes
Q: What was the key lesson you took away from Iridium?
A: No wishful thinking. No ignoring the marketplace. Total open communication among the senior management team. Not working in silos among various groups in the organization.
Q: The company's balance sheet is strong. How long can you go on developing 3G technologies and products before you have to raise more money, either by selling stock or borrowing money?
A: We are "on-plan" in terms of our budgeted revenue for this year. We are going to generate additional revenues, new revenues, [and] we are very careful at this point in time not to exceed the operating budget that we have set for ourselves, which will keep us well inside all of our projections.
Q: So you don't expect to raise more money this year or next?
A: As far as I know, the current planning process does not envision that.
Q: What else would you like to add?
A: If I can be a little bit self-serving here, I think one of my key strengths is translating market requirements and ensuring that the development folks understand what's needed out there to make sure that we're delivering.... I can add a lot to developing the processes to make sure that we have picked the right opportunities and that we have the appropriate resources assigned to those opportunities. So really, it's taking this company to the next level in terms of revenues and customer involvement.
Q: Is that next level billions in revenues or hundreds of millions in the next couple of years?
A: It's probably hundreds of millions. Next couple of years is a pretty short time, but things move pretty quickly, and 3G is upon us. So if we make some appropriate moves -- well, I'm fairly optimistic. |
