InterDigital Inc (IDCC)

[ddutta]

One of the reasons, IMHO, is that what fixed fee revenue we get from Apple going forward (approx. 116 million a year) is less than the $133 million per unit royalties we got from Pegatron in 2016.

Apple fixed fee covers products from all its ODM's (Honhai, Pegatron etc).

Even with Apple signed our recurring royalties have not gone up. It has given us better stability (fewer cry babies like Pegatron, Asus, Sharp who sign a per unit license and then complain they are paying too much) and hopefully will help sign others.

We need to sign the holdouts like LG, ZTE, Lenovo and others to move the recurring handset royalty base to $500 - $600 million range, and also grow the iOT business (Avanci, Harman, CA).

A positive in the report is the $5.9 million in technology solutions revenue from Intel. Wilth Intel getting a share of iPhone market, plus adding CDMA capabilities to their modem, this should continue to grow.

An LG or ZTE license is what is now needed.

Note: With the stock price back under $94, the chances of converting the debt to stock ($316 million) next quarter, are also doubtful. For the convertible to convert ealy, stock has to trade over $94 (130% of conversion price), for 20 of last 30 trading days.