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To: clochard who wrote (7075)	7/21/2011 10:47:22 AM
From: Road Walker	Respond to of 32692

It's All About Patents; InterDigital (IDCC) Could Be Worth $10 Billion to Apple (AAPL) 9:55 am ET 07/21/2011 - Street Insider Ever since InterDigital, Inc. (Nasdaq: IDCC) disclosed announced that it is exploring a sale a few days ago shares have been on an absolute tear. Up 28 percent Tuesday, up 29 percent Wednesday and now up another 15 percent today to $79. The company is being courted by some of biggest names in tech, with Apple (Nasdaq: AAPL) and Google (Nasdaq: GOOG) named as potential buyers. Today analysts at Jefferies commented on the situation that is developing over InterDigital, calling it a "patent war". Jefferies attests that following the surprising Nortel patent auction price of $4.5B for 2% to 5% of 4G patents, a patent war is manifesting itself in the Interdigital auction between Apple and Google. "InterDigital's patents could save Apple$3-$10 per handset and could substantially increase the price of the low-cost Android phones launching in H2:11," Jefferies analyst Peter Misek stated. InterDigital has ~180 engineers, >18,000 patents (awarded and pending), and ~16% of the essential LTE patents versus ~3% for Nortel, Misek notes. OEMs representing 40% of handset shipment license from InterDigital and LG and Nokia, neither current licensee, have paid fees to InterDigital in the past. "This indicates that InterDigital's patent portfolio is broadly accepted. Its owner would likely easily be able to sign cross-licensing deals with other patent holders", he said. A bulk of the company's patents don't expire unit 2020 or later. InterDigital could be worth up to $10 billion to Apple, Misek estimates. "We estimate Apple will ship ~500M phones in the next four years. Assuming a 5% unit CAGR thereafter and a 10% discount rate, the InterDigital portfolio could be worth between $3B and $10B to Apple," he said. If Apple gains control of InterDigital is could create an issue for the Android ecosystem. Apple, through litigation, "could cause the free Android OS to actually become a burden for OEMs, forcing them to become more conservative in their aggressive pricing plan." Rather than a $150 Android, we could see a $200 device, Misek said.

To: clochard who wrote (7075)	7/21/2011 10:48:41 AM
From: rnsmth	Read Replies (2) \| Respond to of 32692

<<Only a minority will overpay for the perceived bling factor of an Apple product and the rest will compare the features and price and go with Android.>> Minority is not a very precise term. That could mean 49.9% of smartphone buyers. Apple has close to 60% of the profit share in the mobile phone business. I think we can be satisfied with that and let the others race to the bottom as they battle for the other 40%. People do not buy Apple primarily for the bling factor. They buy apple for the platform factor, the ecosystem, for the safety and the it just works factors.