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NOK will settle, but does IDCC have enough power to assure a unit based royalty, rather than another disappointing fixed fee capitulation?
I wrote the authors to point out their blunder. QCOM paid NOK nothing. It was NOK who paid QCOM 1.7 bil Euros.
Always consider the source, dndodd. How do you evaluate yourself?
And, who annointed you as Guardian Of The Public Good?
A stock is not a belief system, and is not a team sport.Each share is a reasonably liquid asset, having an ever changing market value, and requiring objective, continuing analysis.
You are free to invest through tinted blinders, but many would prefer some probing analysis and critical thinking. If even most of the connected dots were true over the years, the Houston 100 would be celebrating anniversaries. For how long do you need to bang your head against the wall before you question doing so? Here we are, decades later, and only at $1 bil market cap. Do you still think you know so much more than the rest of the world? Thinking, listening, reading, dissecting, and evaluating, will allow you to make better, more informed decisions, than simply eating sky pie as a steady diet.
This is all great news for Infineon shareholders. Is there an IFX Board?
How can any settlement affect last quarter's earnings?
Eric, you assert that ST-Ericsson, Broadcom, and Qualcomm are positioned to fight it out for 3GSM sockets at Nokia. In your opinion, would the NOK/QCOM license permit the use by Nokia of unlicensed BRCM 3G basebands?
You're right about the ass whooping, though it hasn't gotten BRCM a cross-license.However, BRCM's position has always been that device manufacturers shouldn't pay royalties, and that chipset licenses should exhaust patents to all downstream users of the IPR.Had they wanted IDCC's IPR to strengthen their negotiations for a QCOM 3G license, it seems they would have played that card long ago, when the stock was a teenager.
M3S, you put your finger on the issue. QCOM would never buy IDCC, because they wouldn't be able to charge another dime to their licensees. If you license one QCOM patent for a standard, you license them all for covered standards.Unable to monetize IDCC's patent portfolio, QCOM would obviously be unwilling to shell out billions.
How can any company "work around" a truly "essential" patent? It seems to me that any patent capable of being "worked around", is inherently non-essential.Are all of the patents at issue in the ITC proceeding, claimed by IDCC to be essential to the relevant standards?
All this bravado sounds nervous and insecure.Everyone (including me) expects a settlement. The terms, however, will determine the fair market value of IDCC's "strong hand".Show me the big bucks, a long term, multi-standard license, and not another disappointing fixed fee retreat, and I'll then be a believer.
OT You bet I enjoyed every period of our Terriers' great victory!
Wish I could say the same for The Masters. Phil had an incredible round going, until he fatted that 9 iron into the water. A par there, and one of the two short putts he later missed, would have gotten him into the playoff. I was rooting for Kenny Perry, but for a guy who was puring one iron after another, he simply took the gas.
PANL's market cap, as of Friday, is $367+ million. How much more than that do you think it would take to gobble them up? Where would you like IDCC to take that money from?
Good trial lawyers do everything to tamp down expectations on the eve of trial, and refrain from bellicose "hero" rhetoric. Each of us has won cases we never expected to win, and lost cases we couldn't imagine losing. Too often, the outcome is determined by an unscripted disclosure or gesture from the witness stand, or the subliminal influence of a jaded jurist.Sometimes the trial is better than the file, and sometimes it's not. Only a fool would not fully explore settlement, rather than leave his client's fate in the hands of strangers and circumstance.
What is "fair", is obviously better evaluated by IDCC, their engineers, and their lawyers, than it is by message board mavens and dreamers.How can you know what is "fair" to IDCC, without understanding the commercial value of their patent portfolio? Like Loop, I have no doubt that all of the agreements that IDCC voluntarily executes are "fair" to them.To think otherwise, would imply a breach of their fiduciary duties.
Am I correct that the RIMM agreement is unit based, as was the original GSM/GPRS/EDGE license? If so, that's what you need to grow recurring revenues and earnings commensurate with sales growth in the marketplace, especially in the out years.I hope Samsung is the last of their fixed fee licenses.
Mickey, the simple answer is that negotiations are ongoing, and will likely be dragged out until much closer to trial.Nokia will want to hold onto its money as long as possible, and play hardball until the last concession in terms is exacted. The "substantial progress" disclosure by IDCC a year ago, was designed to prevent damage to the stock from the later reversed Stay of the ITC trial against Nokia. It worked, because the stock gapped up, causing Nokia to remark that the market over interpreted IDCC's perception of the status of negotiations. I have no doubt that Nokia will sign a 3G license with IDCC before the first trial day.
How much Nokia is willing to spend, must meet how much IDCC is willing to take, for there to be a deal.
Your "belief" that "non-cellular and 4G" technologies are all that's left to negotiate with Nokia, certainly isn"t made likely by the lack of inclusion of those technologies in the Samsung agreement.
Let's see, which opinion should be given more weight:
1)Mickey, who admits to technological ignorance, a painful history of bad market bets, but who has a "hunch" that Nokia needs the SlimChip (that no company was willing to buy)?
2)Eric, who is tech savy, spent his career in and around the business, and knows more about Nokia's history, needs, and plans than anyone who regularly posts on the iHub and SI boards?
It's decisions like this that we, who are interested in continuing due diligence, must make on a daily basis.That's precisely why boards must be exposed to, and tolerate without gang retribution, all points of view, in order to be useful.
When they took out the line, one of the potential reasons was for acquisitions. Maybe they no longer have serious expansionist plans, and have plenty of cash flow to run the business.
Last, without dwelling on your QCOM reference, when they bought Flarion for nearly the market cap of IDCC, they got all those foundational Lucent patents, as well as the world's only fully mobile, commercially available, OFDMA system. The pioneering work done by Flarion, which was incubated from Lucent, together with their in-house inventions, gave Qualcomm foundational and essential IPR necessary to all mobile OFDMA systems, including LTE and WiMAX. Then they bought a pioneering MIMO inventor, named Airgo, and locked in essential MIMO patents.That's why Qualcomm has already signed Nokia and one other Tier 1 vendor to per unit royalty agreements covering LTE and WiMAX, and at least 8 stand alone OFDMA licenses have been signed.You might want to pick another issue, because I'm still waiting for IDCC's first LTE license.
And you forgot that IDCC was supposed to have "the engine and transmission" of 3G. Their IPR position in LTE and other technologies will be less impressive,more diluted, and less valuable. I look for contracts for future technologies to be lower than those for 2G and 3G.Your assumption is they will be paid a higher, not lower rate/amount, in the future.That is at least questionable.And for those enamoured of fixed fee agreements, they did buy downside protection, but at the cost of hockey stick growth.Who wants to be in a business where you need sales to decline in order to win?
The Net, you have identified an issue that causes me concern, as an IDCC shareholder. 60% of licensing revenues are now "fixed fee". Assuming the Nokia deal follows that template (which in my opinion is likely), the vast majority of royalty agreement revenues will be "fixed fee".Such agreements bargain away the upside from sales growth, especially in the out years, in favor of mathematical certainty and predictibility.In my opinion, we will be afforded a lower P/E, on a predominantly "fixed fee" schedule. That leaves SlimChip and engineering services revenues to be the upside growth driver, and they are not yet (and may never be) of the magnitude where they can pull that load.
Call me a fan of unit based royalty agreements, but don't call me insulting names for holding that opinion. (My "agenda" is the same as every other shareholder - I want the richest valuation put on IDCC stock as is possible.)
Did you forget the customers for your product are all minor league players? Spreadtrum, Infineon, and NXP are hardly an impressive array of design wins. In the PR, it was clear that no one was interested in buying the SlimChip. Don't you think a vertically integrated manufacturing powerhouse (e.g.Nokia), could have afforded to buy your purportedly "disruptive" engine for a small amount of millions to them, and kept it out of competitive hands? I'm glad that IDCC decided to cut costs, since it couldn"t achieve the R&D/sales scale necessary to compete against the more sophisticated houses, but your assertion that they elected to rent, and refused to sell, is simply revisionist. They tried to sell, but were unable to do so.
And, why would Porsche buy a Lotus engine, when Porsche is winning far more races races around the world with its own?
Who is TC, M3S, and why did you brag to him that you had been rude and juvenile to me? Apparently, any effort to have an adult discussion of issues with you, will be met by grade school name calling.
Such predictable guidance is easily achieved with fixed fee agreements.But upside surprises then become possible only if new licenses are signed. There is both good and bad in fixed fee agreements.
The Spreadtrum chips that Samsung has decided to buy are GSM/GPRS/EDGE, but not 3G. Do you really think that the market is assuming Samsung will ever buy any Spreadtrum 3G chips? (If they do, TD-SCDMA is the best candidate, but even that's speculative.)
Who was that new "analyst" who asserted SlimChip would be sold for $75 mil?All they lacked was a buyer, at any price.
Nicmar, I don't accept the premise that Nokia pays Qualcomm only $4/phone, as the 15 year 2G/3G/4G license they signed was complex, and included the payment of $2.5 bil cash, the transfer of substantial 2G/2.5G/3G/4G patents from Nokia, an agreement not to assert any Nokia patents against Qualcomm, and payment of ongoing royalties at approximately 2% of the wholesale value of each device sold, plus infrastructure royalties from NSN.(I believe the deal to be significantly greater than $4/device.)The flip answer to your question is that Nokia agreed to pay Qualcomm far more than they'll end up paying InterDigital, because their portfolio is more important, and more extensive.One need only look at the licenses both companies have signed, to reasonably infer that conclusion.Sophisticated corporations, relying upon the best engineering and legal advice they can buy, decide the terms of the licenses they are willing to accept.That's how the fair market value of one's portfolios is determined. Unfortunately for those who believe what they want to be true, rather than what has been circumstantially proven to be true, no one on this or any message board is competent to express an independent expert opinion on the commercial value of one or more patents.And when wild eyed assertions are made by laymen, as to such esoteric and expert matters, disappointment in the agreements actually signed is likely to result.You can be certain that IDCC cuts the best deals it can, with the portfolio it has to license.
Mickey, "use one, pay the whole rate", is not intended to make companies overpay. Rather, it prevents exorbitant royalties by capping them at a reasonable, affordable amount relative to the importance of their patent portfolio.No licensee of that company uses only one patent. IDCC also licenses by the technology, at an agreed fixed or unit based rate, irrespective of the actual number of patents intersected.
Mickey, the commercial value of patent portfolios depends upon both the number, and importance, of the inventions involved. Look no further than the rates and terms that sophisticated corporations, relying upon their best engineering and legal counsel, have agreed to, in order to reasonably infer fair market value. All the hoping and comparing in the world won't change the reality.Follow the money.
Mickey, Nokia will license IDCC's 3G FDD patents, but they will not pay anything close to the 2.5% royalty you suggest. And how do we know that? Look no further than the commercial realities of the agreements signed by Apple, LG, RIM, and most importantly Samsung.It is through arms' length negotiations between sophisticated and informed corporations that the market value of one's patent portfolio can be established.
Apples v Oranges
Samsung had a liquidated 2G liability of $160 mil, and had paid no 3G royalties to IDCC. Nokia got forgiveness of some 3G liability when they settled for 2G, have absolutely no 2G exposure, and have a license for certain TDD 3G.
Withdrawn, as being superfluous to Data's responsive post.
How about the notion that if IDCC scraps or off-loads the SlimChip product, the vast majority of future revenues will be derived from royalties. Everyone knows that Nokia will come to terms, but given the way recent licenses with major players have been structured, any Nokia deal is likely to be relatively short in duration, and fixed fee in nature. Inability to sign long term, unit-based royalty agreements, at a robust percentage, takes away S-curve market growth upside, and puts a predetermined, capped, temporally static, number on future earnings. Upside to guidance becomes dependent on signing new licensees, the pool and quality of which will ultimately decline.
I think "the street" is legitimately concerned about how well IDCC will grow, relative to the markets for wireless infrastructure and devices.(And, I expect this stock to predictably pop on the Nokia deal, serving as an exit trigger for many who have hung in.)
Re: secure mobile banking and payments
It's available today, through Firethorn. Among others, their application is offered for iPhone users on AT&T. Check out Firethornmobile.com.
ellismd, like it or not, InterDigital had a 2G arbitration award, and reduction to judgment, in hand. The odds of Samsung overturning the award, and avoiding creditor's remedies, were essentially nonexistent.Under those circumstances, you apparently feel that InterDigital has the discretion to assign some greatly discounted value to the 2G portion of the settlement, and attribute a disproportionate amount to 3G, to establish a distorted 3G value as a pattern for future licensees.
I disagree, and suggest that the market value of the 2G component is essentially the liquidated amount of the outstanding arbitration award plus taxable interest. By analogy, if an employer gets an employee to sign forms establishing their relationship to be that of independent contractor, to avoid certain responsibilities of an employer, the government will ignore that legal fiction and assess the relationship pursuant to objective criteria. Likewise, if the settlement of a personal injury lawsuit is documented with language asserting all monies are being paid for "pain and suffering"(not taxable), and no monies are being paid for loss of earning capacity(which would be taxable), although claims had been made for disability compensation during the case, the IRS can independently pierce that fiction and tax the wage loss fair market value, notwithstanding the self-serving language in the release.
The same sort of thing will occur in the 2G/3G attribution, in my opinion.A fair market value, under the totality of the circumstances, will be assigned to the 2G component, irrespective of efforts to ignore the 2G liquidated damages that were in hand.