Interdigital Communication(IDCC) Message Board

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Technology Stocks : Interdigital Communication(IDCC)

IDCC 396.54

+9.6%

9:30 AM EST

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To: barty who wrote (5035)	3/16/2009 9:07:20 AM
From: slacker711	of 5195

Remember - Samsung shipped comparable CDMA units (WCDMA and CDMA2000) as Nokia in '08. That means they might be in the same ballpark from a settlement points of view. Two points. 1) We dont know that their CDMA2000 and WCDMA rates are the same. As far as I know, Interdigital has been far more active in the WCDMA standards organizations than for CDMA2000. 2) The fact that Samsung and Nokia shipped similar amounts of CDMA units captures a brief moment in time. As WCDMA volumes increase, that is unlikely to remain the case. IDCC will start to burn cash again unless if gets some big fresh sources of cash. A royalty business model that burns cash is fatal. So they need the Nokia cash. All this lumpy cash receipts looks unhealthy to me particularly when you're running cash costs of $160m+ per annum and paying a 33%+ tax rate. I'm hoping that a disposition of the slimchip business will take a substantial chunk of costs out of the business but we'll have to wait and see. LG will be coming up for renewal shortly. Their ability to get a renewal will be a real test of the health of their long-term business model. Slacker

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