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Technology Stocks : Interdigital Communication(IDCC) -- Ignore unavailable to you. Want to Upgrade?

To: Gus who wrote (3855)	2/11/2000 2:42:00 AM
From: Bux	Respond to of 5195

Remember the sequence: follow the infrastructure sales then the initial handset sales then the handset upgrade sales to get a more realistic idea of the dynamics of scale in motion on a daily basis. I think you are essentially correct here although I'm not sure I know what "the dynamics of scale in motion on a daily basis" refers to. I think you are referring to the relatively larger sales of GSM equipment. If so, we still don't learn much about IDC's prospects. First we need to know the chance IDC has of collecting substantial back royalties and future royalties on TDMA/GSM equipment. Some IDC investors apparently peg that as very near a certainty, I put it at a nebulous point between doubtful up to maybe 50/50 but that depends on your definition of "substantial". Certainly every major manufacturer would pay a couple million to make IDC just go away. Then we need to know how much (if any) IDC stands to collect from the various 3G technologies. This is still very much an uncertain. If we knew these things then we could begin to put a value to IDC shares. But if IDC's IPR is so valuable and unavoidable I wonder why the company wasn't bought out for a bit more than their 250 Million market cap last fall. Was there some sort of "poison pill" provision? Certainly the major equipment providers knew what IDC was claiming? Other sincere opinions welcome. Bux

To: Gus who wrote (3855)	2/11/2000 2:55:00 AM
From: Gus	Respond to of 5195

What is BCDMA? FDMA - Frequency Division Multiple Access TDMA - Time Division Multiple Access CDMA - Code Division Multiple Access B-CDMA is IDC's version of CDMA. Again, from IDC's 3/31 10K: Even in that competitive environment, however, InterDigital believes that its B-CDMA technology has several advantages as compared to other currently available or developing digital wireless technologies in these applications: Robust Radio Signal. The B-CDMA radio signal is expected to have extremely high immunity to interference and multipath fading because the radio signal is spread over a larger bandwidth than that utilized by other technologies. In addition, the advanced digital signal processing techniques employed in InterDigital's B-CDMA technology implementation are expected to allow a greater portion of a degraded signal to be recovered. Simplified Network Planning. InterDigital's B-CDMA technology allows nearly all available radio frequencies to be utilized in each cell site. This simplifies frequency planning and the process of cell site planning and network expansion as compared to other digital wireless technologies. Bandwidth on Demand. InterDigital expects that its B-CDMA technology will allow operators to offer services supported by bandwidth on demand to their customers. This means that customers can, through a single air-interface, readily access a full range of services ranging from basic telephony to ISDN. System Design Flexibility. The B-CDMA air interface technology has been designed to allow product implementations capable of utilizing virtually any currently available voice coding technology. (These technologies utilize varying rates of data transfer, which affects service quality and system capacity). This is expected to allow product developers and operators the ability to balance the competing demands of system capacity and service quality. InterDigital expects that systems utilizing its B-CDMA technology will have higher capacity capabilities at comparable service quality levels as compared to systems utilizing other technologies. Privacy. InterDigital believes that CDMA technologies (both broadband and narrowband) allow more secure transmission than other wireless technologies currently available, making intentional or accidental eavesdropping extremely difficult with commercially available technology. Another part of the 10k contains a flat assertion that IDC's B-CDMA does not require any of QCOM's patents in 2g and presumably, it can develop an ALTERNATIVE PATH to 3g, elements of which are being incorporated into WCDMA, and this matches the easily verifiable chronology of IDC's CDMA patent production over the years even before Qualcomm was incorporated. INTERDIGITAL DOES NOT BELIEVE THAT IT WILL BE NECESSARY TO USE ANY OF SUCH ROYALTY-BEARING OR NON-LICENSED QUALCOMM PATENTS IN ITS B-CDMA SYSTEM..... Contrary to the canard that others seem to insist on spreading, IDC is far from being a patent house bent on terrorizing the wireless industry with extortionate lawsuits. From from it, IDC start reducing its large body of TDMA patents to practice in the mid-eighties with its Ultraphone fixed wireless product targeted at the rural areas of developed countries and the urban/rural areas of developing countries, but was unsuccessful in generating enough volume to keep up with the big players. It started to reduce its large body of CDMA patents to practice with Truelink in the mid-nineties -- as reflected in the large percentage of R&D to Sales -- but again got caught up with the move from 2g to 3g, a move that IMO was made partly possible by the tremendous annual advances in DWDM technology which introduced the prospective scalability in bandwidth necessary to accelerate the time scale of the architecture of the network of networks of our times. Another related factor, of course, was continued deregulation of North American telecommunications -- now entering its 3rd decade. Paraphrasing an old saying here, what doesn't kill a company can only make it stronger. Today, IDC has $85 million in cash, no debt, a large body of TDMA/CDMA patents synthesized in part in 2nd generation system-on-a-chip methodology, a partnership with Texas Instruments, and a co-development deal with act-first-talk-later Nokia. Given its mediocre financial past in relation to its genuine accomplishments in TDMA and CDMA, this is not a bad position for a company with only 49 million shares outstanding. Now, one way of using the number of shares outstanding in the financial sensitivity analysis of a company in turnaround is to construct the TDMA and CDMA scenarios that will produce $1.00 in EPS ($49 million), $2.00 in EPS ($98 million), etc. The results of that kind of analysis then go into the 'reward' component of the prudent investor's risk-reward equation. It's fair to say that IDC doesn't have to get greedy about its patents or go to go outside the fair usage guidelines of the 3g Patent Platform -- mix-and-match and hardwired to avoid single-sourcing -- to do very, very well.