InterDigital embraces next-gen wireless
Oct 12, 2000 10:37 AM ET
--------------------------------------------------------------------------------
By Kathleen Spring, LocalBusiness.com
--------------------------------------------------------------------------------
KING OF PRUSSIA, Pa., Oct. 12 (LocalBusiness.com) -- Moving along with changes in the mobile communications industry, 28-year-old wireless technology company InterDigital Communications Corp. said it will expand its product offerings for the third generation (3G) wireless market.
"2G is digital," Janet Point, director of investor relations, said. "3G refers to digital with much higher bandwidth, so you get Internet on the move."
This is a new direction for InterDigital (Nasdaq: IDCC), a 225-person King of Prussia company that has added 60 engineers since the first of the year.
Until last year, an important part of InterDigital's business had been the development, marketing, sales and service of wireless networks of wall-mounted phones in rural areas of Japan and Europe, and also, to a lesser extent, the United States. This business was carried on through strategic partnerships with Siemens AG, Samsung Electronics Co. Ltd. and Alcatel Espana.
With mobile wireless on the horizon, Point said, the partners decided the market for their fixed wireless system was not large enough, and the alliance was dissolved.
InterDigital, whose largest client is Nokia, then turned its full attention to 3G wireless.
The company sells or licenses to wireless device manufacturers the parts of the wireless communication process called "air interface."
The parts, Point said, include elements of getting a message from point A to point B that involve how signals are intercepted and received and how phone locations are pinpointed. It also is the technology that keeps interference to a minimum.
In addition to developing chip-based modems for mobile devices -- which include phones, personal digital assistants and wireless laptop computers -- the company is expanding its product portfolio to include base station modems, radio resource management software and other technology for a mobile environment that will include bandwidth large enough to transmit not just voice, but also rich media, including video.
In the past, InterDigital's technologies have found their largest market abroad, and that will continue to be the case, at least in the short term, according to Point, who said both Europe and Japan have the radio spectrum to support 3G wireless applications "and are committed to build out these systems."
Some observers are predicting explosive growth for wireless. According to Jupiter Research, mobile commerce revenue will grow from $400 million to $7.6 billion worldwide by 2003, while the number of people subscribing to wireless data services will grow from 170 million to 1.3 billion by 2004.
While it is in position to ride this wave, InterDigital is not doing well in the financial markets. Its stock is trading at a little more than $10 per share, down from January's high of $82. Revenue for the second quarter ended June 30, was $11.6 million compared with $12.3 million for the year ago period.
Although she said InterDigital is working aggressively to boost its stock price by getting its story across to Wall Street, Point said the company, with more than $90 million in cash on hand, is not as dependent as on its stock price as are some other technologies companies.
Kathleen Spring covers the New York area for LocalBusiness.com. E-mail her with story ideas and comments.
localbusiness.com |
