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

To: nicmar who wrote (5031)	3/16/2009 8:41:15 AM
From: barty	Read Replies (1) \| Respond to of 5195

Slacker - too early to get into the detail, but let's assume IDCC wins over their ITC case. I still doubt Nokia will pay more on a per unit basis than Samsung. We know Nokia are fully paid up on GSM with IDCC, so if Samsung's gets 10 yr license for 3G and CDMA2000 shipments for $400m less their GSM bond of $166m+, then I think it will be around the same level (~$230m) for Nokia. 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. The problem here is that when Samsung is paid up mid-2010 - 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.