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Company Press Release
Interdigital Announces Change in B-CDMA Alliance
KING OF PRUSSIA, Pa.--(BUSINESS WIRE)--Feb. 19, 1999--InterDigital
Communications Corporation (ASE: IDC) announced today a change in the
structure of its B-CDMA Alliance(TM).
Siemens AG of Germany, as part of a strategic realignment of its
business, has notified InterDigital that it intends to withdraw from the
B-CDMA(TM) technology and product consortium. InterDigital and Siemens
intend to define the process for Siemens' withdrawal and to address
other aspects of the InterDigital/Siemens relationship.
''We are obviously disappointed with Siemens decision. They have been a
partner with us since 1994,'' said William Doyle, President of
InterDigital. ''However, we have been informed by Siemens that its
decision is a result of a change in strategic emphasis involving a
restructuring of its business. Siemens has also indicated that our
technology has performed well in field trials in several countries.
''We did not expect revenue from Siemens in 1999, since the company was
not making further cash contributions for B-CDMA technology and product
development, and we expected Siemens to contribute only a modest level
of royalties from wireless local loop system sales in 2000.''
InterDigital has previously indicated that its earnings performance in
1999 is expected to be driven by revenues from patent licensing and
technology development relationships with other companies.
''The wireless local loop market has not yet generated rapid growth,
while the market for third generation technology is accelerating,''
Doyle continued. ''Recognizing that, we have been transitioning our
business from a singular focus on the fixed wireless market to a
diversified set of opportunities in both fixed and mobile markets. Our
most recent agreement with Nokia, in which we will develop third
generation wireless technology, will accelerate that transition.''
Doyle indicated that the company intends to continue to support its
other partners, Alcatel and Samsung, to capture value from B-CDMA
technology and products. ''We plan to work creatively with our partners
to help them take full advantage of the robust capabilities of the
B-CDMA air interface we have developed during the past five years. We
want to help them meet their customers' needs in any market where B-CDMA
technology can be effectively deployed.''
InterDigital's work in developing B-CDMA technology has enabled the
company to build a significant inventory of know-how and patents related
to wideband CDMA technology. Since 1995, approximately 185 CDMA patents
and patent applications have been filed by the company or issued to it
around the world.
The company has a strong track record of success in generating
substantial revenues and earnings from patent licensing.
InterDigital will announce its earnings for the fourth quarter and full
year of 1998 on Feb. 25, 1999. The company announced on Jan. 28 that it
plans to report stronger than expected results for the quarter and full
year. Also, InterDigital more than doubled its cash balance at the end
of 1998, compared with 1997.
Cash on hand is expected to increase further in the first quarter of
1999 as a result of payments from existing patent licensees and a
long-term technology development and licensing agreement with Nokia.
On Feb. 1, 1999, InterDigital and Nokia announced a long-term
cooperative agreement to develop wireless technology for third
generation applications, including high-speed internet access. That
project is now underway and is expected to last several years.
InterDigital will be paid by Nokia for its work in developing this new
technology over the life of the engineering development project.
As part of the agreement, Nokia is also making a payment of
approximately $30 million in the first quarter of 1999.
InterDigital develops and markets wireless telecommunications systems
and components using both proprietary and standards compliant
technologies for voice and data communications. InterDigital®, Broadband
Code Division Multiple Access(TM), and B-CDMA(TM) are among the
trademarks of InterDigital Communications Corporation.
As used herein., where the context so requires, references to
InterDigital Communications Corporation includes reference to
InterDigital Technology Corporation, the holder of InterDigital patents.
For more information, please visit InterDigital's web site:
www.interdigital.com.
This press release contains forward looking statements regarding
InterDigital's current beliefs and expectations as to future revenues,
earnings and cash position, InterDigital and Siemens defining the
process for Siemens' withdrawal, the impact of this event on revenues,
the Company's ability to diversify into mobile markets, its ability to
continue working with other B-CDMA Alliance(TM) partners and capture
value from B-CDMA(TM) technology and products, and anticipated payments
from Nokia and from existing patent licensees.
Such statements are subject to risks and uncertainties. Actual outcomes
could differ materially from those expressed in any such forward looking
statement due to a variety of factors including, but not limited to:
inability of Siemens and InterDigital to negotiate mutually acceptable
terms for the withdrawal, attempts by other alliance partners to
re-negotiate their relationship including withdrawal from the B-CDMA
Alliance(TM), failure to achieve desired development goals, budgets
and/or schedules, the availability of competitive products or technology
superior on a perceived, relative or actual basis with the
InterDigital's products or technology, Nokia's exercise of its rights to
terminate the development project for convenience, inability to retain
or hire adequate personnel, failure to enter additional sufficient
strategic alliances necessary to achieve the Company's business
objectives, failure of the Company to successfully negotiate patent
licensing agreements, inability to enforce patents against third parties
and failure of licensees to meet expectations and commitments.
InterDigital undertakes no duty to publicly update any forward looking
statements, whether as a result of new information, future events or
otherwise.
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Contact:
InterDigital
Rip Tilden, 610/878-5664
e-mail: rip.tilden@interdigital.com
or
Blair Christie, 610/878-7866
e-mail: blair.christie@interdigital.com |
