Marchma asked me to post this because it wouldn't post on the BULL
Revised compelling reason #13 for owning IDCC stock
13. IDCC is strategically positioned within an explosive industry, which is projected to generate astronomical future revenues, and offers superior value over its competitors.
Several industry statistical groups are currently projecting total 3G and 4G revenues in the trillions of dollars. We are just beginning a new wireless revolution which will entail: Wireless + an always on Internet + multimedia messaging + pictures + streaming video + video conferencing + music on demand + location services + mobile ecommerce + computer functions + voice + complete mobility of all these functions = a New World. Those companies, such as IDCC, that are strategically positioned to take advantage of this technological shift in paradigms will reap huge financial rewards. IDCC has embedded their technology into all of the future standards. No matter which wireless standard or what type of wireless products/devices become dominant in 3G, IDCC’s technology will be there. One will need special calculators with extra 0’s, according to our CEO Howard Goldberg, to calculate a probable royalty to IDCC from all future 3G devices.
IDCC’s closest competitor, who has a similar business model, is Qualcomm. Both companies own substantial wireless IPR. Neither company is an equipment manufacturer any longer. Qualcomm sold their handset and infrastructure divisions, whereas IDCC quit manufacturing their fixed local loop Ultraphone system. Both companies' business models now focus on IPR licensing, wireless protocol software and chips, and developmental services. Both companies are positioned to do extremely well in 3G.
However, there are some notable differences between these two competitors. IDCC has developed IPR in the TDMA/GSM standards, whereas Qualcomm has developed very little in these standards. IDCC has focused upon wideband CDMA in 3G to best accommodate huge amounts of data, whereas, Qualcomm has focused on narrowband CDMA. Wideband CDMA, which is projected by most wireless industry groups to capture at least 80% of the future 3G market, has elements of TDMA/GSM mixed in with the CDMA. WCDMA is IDCC’s forte. Qualcomm’s real strength lies in the CDMA 2000 narrowband standard, which is projected to ultimately garner only 15% of the 3G market. However, Qualcomm does have significant IPR in WCDMA also, and IDCC does have IPR in CDMA 2000 as well. The recent strategic agreement with Tantivy, whereby IDCC obtained exclusive licensing rights to over 200 of Tantivy’s CDMA2000 patents, when coupled with InterDigital’s existing CDMA2000 patents significantly enhances IDCC’s IPR position in the CDMA2000 standard.
Qualcomm has licensed over 100 companies for its 2G technology, whereas IDCC has licensed only 28 companies. QCOM has been fully rewarded already for its 2G contributions and IPR. IDCC has not yet been properly compensated for all of their 2G contributions and IPR. All equipment manufacturers will eventually need to come to IDCC for a 3G license. At that point or before, unresolved 2G issues with unlicensed manufacturers will need to be worked out. This might entail 2G settlement amounts with future installment payments, similar to the NEC arrangement, or higher 3G royalty rates, or guaranteed 3G chip purchases from an IDCC chip partner, or combinations thereof with other possible creative solutions. |
