Interdigital Communication(IDCC) Message Board

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Technology Stocks : Interdigital Communication(IDCC)

IDCC 342.70

-1.0%

9:35 AM EST

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To: Gus who wrote (4347)	6/26/2000 12:40:00 PM
From: w molloy	Read Replies (1) of 5195

>> 1% (royalty rate) x [80% (TDMA/GSM) x 120m (handsets sold by Nokia) x $100 (ASP)] = $96m; What is royalty paid on? ASP, BOM or the price of the ASIC? Haven't you been saying that the BOM for GSM handsets is around $40? and since you concede a 1/2% royalty rate, the flipside of the speculated arrangement is $25 mill, assuming a more realistic royalty rate assessed on the BOM The other questionable assumption is that NOK can continue to sell 120million handsets a year until WCDMA kicks in. Did you know that, along with ERICY, NOK are beginning to outsource handset design and manufacture to Taiwan, and this trend will continue in China? This trend reduces the BOM even further, as GSM handsets become commoditised. IDCC will not receive recurring fees from NOK when WCDMA rolls out? Under the terms of the co-development deal, Nokia is paying over $3m per quarter ($36+m over 3 years) in engineering services to IDCC for jointly developing WCDMA. IDCC retains ownership of the technology developed while Nokia gets royalty-free use of the technology. I understood that NOK had identical agreements regarding the TDD and FDD variants.

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