InterDigital Announces Increased Nokia Funding for WCDMA Technology Development Program
KING OF PRUSSIA, Pa.--(BUSINESS WIRE)--Oct. 15, 2001
InterDigital Continues to Strengthen its Position as Developer of
Essential Technology for Third Generation Wireless Products
InterDigital Communications Corporation (Nasdaq:IDCC), a leading developer of wireless technology and product platforms, announced today that it has reached agreement with Nokia to increase the funding of the Wideband CDMA (WCDMA) technology development program, which was initiated in February 1999.
The companies are continuing the development and validation of the fully standards compliant Wideband Time Division Duplex (WTDD) technology InterDigital is developing for Nokia, its initial customer. The program will include the delivery of a test platform that will enable InterDigital and its customers, including Nokia, to demonstrate the technology to wireless operators, producers of equipment and components and applications developers. The funding from Nokia for the technology development program has been increased to a maximum of approximately $58 million, up from the original estimate of approximately $40 million.
The WTDD technology InterDigital is developing is a key component of the 3G UMTS WCDMA air interface protocol. WTDD, supporting voice and data, is ideally suited to handle asymmetric data communications applications such as mobile internet access, e-mail communications, video streaming, file transfers and many other applications. InterDigital is a pioneer in defining the 3G standards and in developing the WTDD air interface technology. As it continues its work with Nokia, InterDigital is strengthening its position as a leading contributor to the standards and developer and owner of the technology. InterDigital has positioned itself as the leading source of WTDD technology platforms for manufacturers of 3G products worldwide.
Howard Goldberg, InterDigital's President and Chief Executive Officer, commented, "Our continuing work with Nokia and our commitment to the development of leading WCDMA technology platforms are based upon our confidence in the long-term potential of the third generation wireless market. We are among the significant contributors to the 3G standards which now include a substantial amount of our innovation and invention. We are actively participating within global standards groups to strengthen our position in the 3G marketplace.
"There is growing momentum and interest in WTDD technology. It is complementary to Frequency Division Duplex (FDD) and is designed to function seamlessly with FDD as part of the complete WCDMA solution. Operators and equipment producers are recognizing that a complete WCDMA solution, consisting of FDD and WTDD, will provide more efficient use of spectrum and a broader range of applications and services. The full WCDMA solution will promote higher customer usage of 3G products and higher revenue."
Because of changes in the Nokia contract, InterDigital will report revenue for the remainder of the technology development program on the "percentage of completion" accounting basis beginning in the third quarter of 2001. This will take into account the contract maximum of approximately $58 million.(1) Previously, revenue associated with this program had been reported on a "time and materials" basis. As of June 30, 2001 InterDigital has billed approximately $46 million under this contract. While the Company currently expects reported revenue from the technology development program to be lower in the second half of 2001 than the first half of 2001, program revenues for the full year 2001 are expected to exceed program revenues for the prior year.
InterDigital also announced that it expects to report third quarter 2001 earnings that will be approximately in line with the most conservative market expectations, even as the accounting treatment for the Nokia contract changes. As of October 12, 2001, analysts' estimates for the Company's third quarter 2001 results ranged from a loss of $0.06 to $0.09 per share. The Company will provide further guidance on its expectations for the balance of 2001 when it reports its full financial results for the third quarter on October 23, 2001.
Mr. Goldberg added, "Our strategic relationships with Nokia and Infineon Technologies, to develop Wideband CDMA technology platforms, are focused on the right technologies and products and aimed at a very attractive long-term market. With our partners, we are dedicating ourselves to moving forward aggressively to bring these technology platforms and associated products to market because we expect the long-term return to the Company, and to our shareholders, to be substantial." |
