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OT: mschere and habu, my thanks to you both for your help.
OT: mschere, Could you, or someone else, perhaps help me find the site(s) or post(s) that gave the actual contract language between IDCC and NEC, Samsung, and Nokia? TIA
GE_Jim,
Don't be gone too long. I for one look at every post and chart you produce. I don't understand it all, but I appreciate the opportunity to learn from someone who knows more about a subject than me. You're one of them. So, ignore the flak, and keep on, keepin on.
Loop,
Well said, ....Again!!! Ronnie, you and Loop (along with mschere) are some of my "must read" posters.
Like Funny Cide, we're rounding the turn, heading for home. Don't leave now. (We need you to help us assure that IDCC doesn't come in 3rd.)
JL
UTStarcom's PAS a Hit in China
JUNE 9, 2003
SPECIAL REPORT -- HOT GROWTH COMPANIES
Ringing Off the Hook in China
Sci-fi technology? Nope. UTStarcom's ultracheap wireless service makes use of existing networks
Taiwan-born, Berkeley-educated Hong Liang Lu admits to having had negative stereotypes of mainland China before he first visited there in 1990. "As a kid, I was brainwashed by Chiang Kai-Shek," he says. But rather than a dour land of communist automatons, he found a vibrant populace badly in need of decent phones. Then, as now, less than 10% of the Chinese had a land line, and service was so poor that Lu would have to pick up the phone dozens of times before he got a dial tone. "Before that trip, I hadn't really thought about doing business in China," he says. "Afterward, I felt it made no sense to do business anywhere else."
That was the first of two big decisions that have helped make Lu's UTStarcom Inc. perhaps the world's hottest telecom-gear supplier. The second was taking a chance on a technology called Personal Access System (PAS), which was developed in Japan but never caught on there. PAS uses phones that offer wireless calling. But unlike cellular systems, PAS allows users to send and receive calls only from a limited area and doesn't offer roaming. By combining UTStarcom gear with existing infrastructure, phone companies can deploy PAS for just $100 per subscriber, roughly half the price of cellular systems.
The combination of an underserved market and an inexpensive product that meets its needs has made PAS-based services -- marketed in much of China as "Little Smart" -- a runaway hit. The big Chinese phone companies, including China Telecommunications Corp., have signed contracts with UTStarcom worth more than $1 billion in the past year. As a result, Alameda (Calif.)-based UTStarcom is prospering like it's 1999. It has blown past Wall Street's expectations in each of the 12 quarters since its initial public offering in March, 2000, and it has upped guidance on revenues twice this year already. In the first quarter, sales soared 80%, to $330.5 million, and profits more than doubled, to $37.3 million. For the year, profits are expected to reach $168.7 million on sales of $1.7 billion, according to brokerage Pacific Growth Equities. "Our biggest problem is keeping up with demand," says Lu. So far this year, the stock price has risen 45%, to about $29.
Lu's approach stands in stark contrast to that of many of his beleaguered telecom rivals. While others set off to build gee-whiz technology for the great broadband future, Lu focused on existing customer needs. The former Kyocera Corp. exec raised $220 million before the IPO -- $166 million of that from Softbank Corp., whose CEO, Masayoshi Son, worked with Lu in an Oakland (Calif.) ice-cream parlor during college. Today, Softbank owns 23% of UTStarcom, partly because Western venture capitalists weren't interested in an outfit selling a once-failed, low-end technology to China's masses.
The big Chinese phone companies were also lukewarm at first. Throughout much of the 1990s, Lucent Technologies was their main provider of telecom gear. "[Lucent] could go in with a private jet and see the President of China," says Lu. "We were nobody." Lu was relegated to cold-calling telecom officials in China's hinterland. But sales began to mount in 1998, after UTStarcom began pitching PAS as a cellular alternative. With no charge for incoming calls and with outgoing ones costing just a quarter of the cellular rate, sales took off, particularly among blue-collar folks who didn't travel much and didn't need roaming. Today, there are 12 million PAS subscribers in China. Given that PAS was recently O.K.'d in Beijing and Chongqing, there will no doubt be millions more soon. Lu has also inked deals in Vietnam, Panama, and India -- which has 1.1 billion people but only 35 million phones. "It's a market that's going to explode," says Lu.
That's not to say there aren't risks. SARS is a serious threat to China's economy and could put the brakes on sales. And cellular rivals are moving to lower their prices, which could boost competition. Still, 48-year-old Lu has proved his ability to make the best of bad situations. Now, his efforts are being noticed by suitors. "The rumor is that he has been told: 'You tell us the price, and we'll pay it,"' says JMP Securities analyst Sam Wilson.
And Lu says he was shocked when more than 100 Wall Street analysts showed up for a company briefing on May 21. When he started out, Lu could barely get his calls returned. Now, it seems as if the whole world is on the line.
By Peter Burrows in San Mateo, Calif., with Dexter Roberts in Beijing
Plumear, Thank you for voicing what, IMO, many of us lurkers are feeling as we watch a highly respected and valued member of this Board get skewered and roasted. Ronny ranks as high as the Dallas 3 in terms of incisive, thoughtful, and meaningful contributions to all Long IDCC investors.
I hope that the ASM brings good news for all of us. I also hope that it brings a close to the sniping and in-fighting that severely lowers the quality, contribution, and reputation of Jim's board.
Ronny, we need the likes of you, Loop, TC, DD, Jim, Joel, BSW, Dish, Mickey, Oso, et al, and your great contributions, to counter the drivel and tripe that has recently shown up here. Please keep posting.
Ericy probed for accounting irregularities.
JL
DJ UBS: Probe Into Ericsson Launched On Bank's Initiative
ZURICH (Dow Jones)--A spokesman for Swiss bank UBS AG (UBS) Thursday confirmed that it's involved in the investigation into Swedish telecommunications company Ericsson (ERICY), but added that the investigation had been launched at the bank's own initiative.
"We're very comfortable with the situation because the investigation was launched on our initiative," Rudolf Buergin told Dow Jones Newswires.
Buergin said staff at the bank had noticed odd transactions in some accounts and alerted Swedish authorities.
Swiss authorities have raided several offices in and around Zurich as part of an ongoing investigation by Swedish prosecutor Lage Carlstroem into allegations Telefon AB LM Ericsson (ERICY) obstructed an audit by withholding tax information.
Sweden's economic crime bureau said in a statement the raids took place Wednesday, and a large number of documents and items which "may be significant for the investigation were seized."
The objective of the raids was to determine who at Ericsson may have been involved with an alleged improper transfer of money, it said.
Ivo Hoppler, a Zurich prosecutor involved in the investigation, said Swiss police, acting on a request for assistance from Swedish authorities, raided banks in Zurich and Schaffhausen and secured documents and electronic data.
A report in Swiss weekly Cash had named UBS as the main bank involved.
-By Carey Sargent, Dow Jones NEwswires; +41 1 211 6637; carey.sargent@dowjones.com
(END) Dow Jones Newswires
May 22, 2003 09:34 ET (13:34 GMT)
From the Ericy Agreement, the
Dispute Resolution Process;
This sounds like "boiler plate" language that could very well apply to the Nok/Samsung conversation(s).
As I read this, we get 90 days for Management to discuss and agree, 105 days for the mediation process, following the failure of Management agreement, and 1 year (plus) for Arbitration, following the failure of mediation. (Pls check my addition.)
Let's hope that NOK/Sam want their discount.
JL
ARTICLE VI
DISPUTE RESOLUTION
6.1. Agreement to Dispute Resolution Procedures. Any Dispute shall be
resolved in accordance with the procedures specified in this Article VI, which
shall be the sole and exclusive procedures for the resolution of any such
Disputes. Notwithstanding the foregoing, except as the parties may agree in
writing, neither party shall be compelled to submit to negotiation, mediation or
arbitration under this Article VI any dispute or other matter relating to
Licensee's alleged infringement of ITC's Third Generation patents.
6.2. Good Faith Negotiations. In the event of any Dispute, the parties
shall first attempt in good faith to resolve such Dispute promptly by
negotiation between senior level representatives who have authority to settle
the Dispute. Any party may give the other party written notice of any Dispute
not resolved in the normal course of business. Within 15 days after delivery of
the notice, the receiving party shall submit to the other a written response.
The notice and the response shall each include (a) a statement of the party's
position and a general summary of arguments supporting that position, and (b)
the name and title of the person(s) who will represent that party in the
negotiations. Within 30 days after delivery of the notice of Dispute, the
representatives of the parties shall meet in Washington, D.C., or some other
mutually acceptable time and place, and thereafter as often as they reasonably
deem necessary, to attempt to resolve the Dispute. All reasonable requests for
information made by one party to the other will be honored; however, no party is
required to provide confidential, trade secret, proprietary, or privileged
information excepting information that is required to be provided pursuant to
this Agreement. All negotiations pursuant to this clause are confidential and
shall be treated as compromise and settlement negotiations for purposes of
applicable rules of evidence. If a party refuses to negotiate as provided
herein, then any other party may immediately initiate arbitration as provided in
Article VI.
6.3. Mediation of Disputes. If any Dispute has not been resolved by
negotiation as set out above within 90 days of delivery of the notice of
Dispute, or if the parties failed to meet within 30 days of delivery of the
notice of Dispute, the parties shall endeavor to settle the Dispute by good
faith mediation. Upon the expiration of the negotiating period, any party may
give written notice of mediation. The parties shall attempt to agree upon a
qualified, neutral individual who shall serve as mediator. If the
-10-
<PAGE>
PRIVILEGED AND CONFIDENTIAL
parties fail to agree upon a mediator within 15 days of delivery of the notice
of mediation, the mediator will be appointed by the American Arbitration
Association from its roster of neutral mediators. The mediation shall occur in
Washington, D.C. within 30 days after appointment of a mediator, or at such
other time and place as the parties may agree. Any Dispute which remains
unresolved 60 days after appointment of a mediator shall be settled by
arbitration in accordance with Section 6.4 of this agreement. If a party refuses
to participate in the mediation process as provided herein, any other party may
immediately initiate arbitration as provided in Section 6.4. The parties shall
bear the cost of the mediation equally between them. Each party shall be
responsible for its own attorneys' fees relating to the mediation. Other than
with respect to its occurrence or the failure to occur, the mediation is in all
respects confidential and shall be treated as compromise and settlement
negotiations for purposes of applicable rules of evidence. The mediator may not
serve as an arbitrator in any subsequent arbitration proceedings concerning the
Dispute.
6.4. Arbitration of Disputes. If any Dispute has not been resolved by the
non-binding procedures set forth in Sections 6.2 and 6.3 within the time periods
provided for therein, either party may submit the Dispute to arbitration
administered by the American Arbitration Association ("AAA") under its then
current ICDR International Arbitration Rules ("AAA International Rules"), and as
set forth in this Article. The arbitration proceeding shall take place in
London, UK, in English, before a panel of three (3) arbitrators, all of whom
shall be admitted to practice law in at least one jurisdiction in the United
States, and at least one of whom shall have substantial experience in the field
of patent licenses. The arbitration shall be commenced and conducted as follows:
(a) Three arbitrators, appointed in accordance with the AAA
International Rules, shall hear the Dispute. Any person who (or whose spouse) is
or has been an employee, officer, director, partner, legal counsel, consultant
to or agent of ITC, IDC or Licensee or any of their respective Affiliates shall
be deemed to be partial and to have a conflict of interest and may not be
appointed an arbitrator. Should an arbitrator die, resign, refuse to act, or
become incapable of performing his or her functions as an arbitrator, the AAA
may declare a vacancy on the Arbitral Tribunal. The vacancy shall be filled by
the method by which that arbitrator was originally appointed.
(b) The parties shall request that the arbitrators conduct the
arbitration proceeding in an expedited fashion in order to complete the
proceeding within one (1) year of the date upon which the arbitration was
initiated under the AAA Institutional Rules. The parties shall use their best
efforts to cooperate with the arbitrators to complete the proceeding within such
one (1) year period. However, the Arbitral Tribunal may extend this period for
good cause shown.
(c) The arbitration proceedings shall be governed by this Agreement,
the AAA International Rules, and by the procedural arbitration law of the site
of the arbitration, and by the United Nations Convention on the Recognition and
Enforcement of Foreign Arbitral Awards. The Arbitral Tribunal shall determine
the matters at issue in the Dispute in accordance with the substantive law of
the State of New York and U.S. Federal patent law, without regard to conflicts
of law principles. The Arbitral Tribunal shall decide the issues submitted as
arbitrators at law only and shall base its award, and any interim awards, upon
the terms of this Agreement and U.S. Federal patent law and the laws of the
State of New York. The Arbitral Tribunal is not empowered to and shall not act
as amiable compositeur or ex aequo et bono.
(d) The Arbitral Tribunal shall take into account applicable
principles of legal privilege and related protections, such as those involving
the confidentiality of communications between a lawyer and a client and the work
product of a lawyer, and no party or witness may be required to waive any
privilege recognized at law. The Arbitral Tribunal shall issue orders as
reasonably necessary to protect the confidentiality of proprietary information,
trade secrets, and other sensitive information disclosed.
-11-
<PAGE>
PRIVILEGED AND CONFIDENTIAL
(e) Pursuant to a schedule to be established by the Arbitral Tribunal,
the parties shall exchange those documents upon which the producing party may
rely in support of any claim or defense. The parties may further exchange
documents in response to written requests for disclosure of non-privileged
documents directly relevant to the determination of the issues presented for
determination by the Arbitral Tribunal. Any dispute regarding such requests for
disclosure or the adequacy of any party's disclosures shall be determined by the
Arbitral Tribunal consistent with the expedited nature of arbitration.
(f) Escrow. In the event of a Dispute, the party alleged to owe any
amount due under this Agreement ("Depositor") shall deposit into an interest
bearing account with a mutually agreed to independent escrow agent (appointed by
the Arbitration Panel in the event of a failure to agree), an amount equal to
[**]percent ([**]%) of the amount in dispute. The party requesting an escrow
("Claimant") shall make a showing to the Arbitration Tribunal that there are
facts to support the claimed amount. The deposit of any escrow monies shall be
made within thirty (30) days from such date that the Arbitral Tribunal has
declared that the Arbitration proceedings have commenced. Notwithstanding the
above, any amounts payable under this Agreement which are not disputed shall be
paid to the party to which they are owed and not escrowed pending resolution of
the arbitration proceedings. The escrow agent shall be empowered to release any
or all monies, including accrued interest, from the escrow account:
(i) to the Claimant only to the extent determined by a decision
made by the Arbitral Tribunal, and
(ii) to the Depositor any amount remaining upon resolution of all
of the Claimants' claims; or
(iii) as agreed to in writing and signed by each party.
The parties shall share the cost of the escrow agent equally.
(g) Awards. All awards shall be in writing and shall state the
reasoning upon which the award rests. Any award shall be made and signed by at
least a majority of the arbitrators. The Arbitral Tribunal is expressly
empowered to grant any remedy or relief available under the law, including but
not limited to specific performance of this contract or matters arising out of
or in connection therewith and injunctive relief against the unlicensed sale of
Covered Products. Judgment on the award may be entered in any court of competent
jurisdiction. Any judgment or order of specific performance shall be
enforceable, without opposition in any country. Both parties shall bear equally
the cost of the arbitration (exclusive of legal fees and expenses, all of which
each party shall bear separately). Any monetary award shall be payable in United
States dollars, free of any tax or other deduction. Any determination of the
arbitration shall be binding solely on the parties hereto. All Awards shall be
paid within ten (10) days of such Award as to escrowed funds and within thirty
(30) days of such Award as to non-escrowed amounts.
(h) The failure or refusal of any party, having been given due notice
thereof, to participate at any stage of the dispute resolution proceedings shall
not prevent the proceedings from continuing, nor shall such failure or refusal
impair the validity of the award or cause the award to be void or voidable, nor
shall it be a basis for challenge of the validity or enforceability of the award
or of the arbitration proceedings. If any party fails to fund the escrow or to
timely pay an advance on fees and
** Material has been omitted and filed separately with the Commission.
-12-
<PAGE>
PRIVILEGED AND CONFIDENTIAL
costs ordered by the Arbitral Tribunal or the AAA within thirty (30) days after
the date set for such deposit, that party shall be deemed to be in default of
the Arbitration. The Tribunal and/or the AAA shall then determine whether the
funds on deposit for fees and costs are sufficient to satisfy the anticipated
estimated expenses for the proceeding to continue on an expedited basis without
the participation of the defaulting party. If so, the proceeding will continue
without the participation of the defaulting party, and the Tribunal may enter an
award on default. Prior to entering an award on default, the Tribunal shall
require the non-defaulting party to produce such evidence and legal argument in
support of its contentions as the Tribunal may deem appropriate. The Tribunal
may receive such evidence and argument without the defaulting party's presence
or participation. If the funds on deposit are deemed insufficient to satisfy the
estimated costs of continuing as provided herein, the non-defaulting party may
make all or part of the requested deposit in an amount sufficient to allow the
proceeding to continue without the participation of the defaulting party. If the
non-defaulting party chooses not to make the requested deposit, the Arbitral
Tribunal may suspend or terminate the proceedings.
(i) Unless the parties agree otherwise, the parties, the
arbitrator(s), and the AAA shall treat the dispute resolution proceedings
provided for herein, any related disclosures, and the decisions of the Arbitral
Tribunal, as confidential, except in connection with judicial proceedings
ancillary to the dispute resolution proceedings, such as a judicial challenge
to, or enforcement of, the arbitral award, and unless otherwise required by law.
6.5. Interim Measures from the Courts in Aid of Arbitration. At any time
after submission of a written notice of a Dispute, any party may request a court
of competent jurisdiction to grant interim measures of protection including
without limitation temporary, preliminary, and injunctive relief: (a) to prevent
the destruction of documents and other information or things related to the
Dispute, or (b) to prevent the wasting or hiding of assets. Such injunctive
relief shall be enforceable in any country and neither Licensee nor Licensee's
Affiliates shall oppose such enforcement.
6.6. Mandatory Procedures. The parties agree that any Dispute arising under
this Agreement shall be resolved solely by means of the procedures set forth in
this article, and that such procedures constitute legally binding obligations
that are an essential provision of this Agreement. If either party fails to
observe the procedures of this article, as may be modified by their written
agreement, the other party may bring an action for specific performance of these
procedures in any court of competent jurisdiction. In the event Licensee fails
to comply with an Arbitral award, ITC shall be entitled (notwithstanding the
other provisions of this Agreement) to petition any court of competent
jurisdiction for temporary, preliminary and permanent injunctions against the
exercise of the licenses granted by this Agreement. Such injunctive relief shall
be enforceable in any country, and neither Licensee nor any Licensee Affiliate
shall oppose such enforcement.
6.7. Performance to Continue. Licensee shall continue to perform its
undisputed obligations under this Agreement pending final resolution of any
Dispute arising out of or relating to this Agreement. Nothing in this article,
including the requirements to mediate and arbitrate Disputes, shall relieve
Licensee from its obligation to make undisputed Payments pursuant to Article III
of this Agreement during the pendency of such proceedings, or delay ITC's right
to terminate this Agreement in accordance with Section 5.2.
6.8. Statute of Limitations. The parties agree that all applicable statutes
of limitation and time-based defenses (such as estoppel and laches) shall be
tolled while the procedures set forth in this Article VI are pending. The
parties shall cooperate in taking any actions necessary to achieve this result.
6.9. Relief From Stay. Licensee, in the event Licensee becomes the subject
of a voluntary or involuntary petition in bankruptcy under the U.S. Bankruptcy
Code or any other insolvency statute, or
-13-
<PAGE>
PRIVILEGED AND CONFIDENTIAL
any foreign counterpart thereof, hereby consents to the applicable tribunal's
grant of any ITC request of relief from any stays, automatic or otherwise, or
other orders, laws or regulations that may limit ITC's rights to enforce the
terms of this Agreement, including without limitation the right to terminate
this Agreement pursuant to Article V of this Agreement for Licensee's breach.
The parties agree that any Dispute under this Agreement would not be a core
proceeding under 28 U.S.C. Section 157, because, inter alia, this Agreement was
entered into prior to the commencement of any bankruptcy proceeding and not in
contemplation thereof. Therefore, in the event a bankruptcy or similar
insolvency proceeding is commenced by or against Licensee, Licensee will
continue to support and use best efforts to ensure the arbitration of any
Disputes arising under this Agreement as set forth herein.
themaude,
I am a Business Consultant. Have been one for 3 decades,.... Inside and outside big and small companies. Your reply is, IMO totally on the money, and should be read by all that have an interest in the "option" debate. I couldn't agree with you more.
A timely article on Options.
Looks like we're not the only shareholder group or company with strong feelings on this issue.
Technology - Reuters
Expensing Options Could Lead to Job Loss, Cisco CEO Says
Tue Apr 29, 4:08 PM ET Add Technology - Reuters to My Yahoo!
By Ben Klayman
CHICAGO (Reuters) - U.S. technology companies might shift jobs overseas if they are forced to account for stock options as a business expense, the chief executive of Cisco Systems Inc. (Nasdaq:CSCO - news) warned on Tuesday.
"Jobs would go in the first decade, followed by the companies," John Chambers, Cisco's chief executive, told industry executives at a networking conference in Las Vegas.
Stock options, or the right to buy or sell stock at a set price at a future date, are a hot issue in the aftermath of a wave of corporate scandals that has rocked Wall Street. Some critics blame the scandals, at least in part, on an explosion in stock option issuance in the 1990s.
Critics say stock options can inflate earnings because they are excluded from compensation costs and companies do not book them as an expense. Currently, companies must disclose the cost of stock options only in a footnote to their financial statements.
The top U.S. accounting standards (news - web sites) setter, the Financial Accounting Standards Board, is edging toward a controversial ruling that stock options be treated as a business expense.
Chambers called the potential law requiring the expensing of stock options "the engineering and high-tech job export act of 2003." His comments followed similar criticism by the CEO of Intel Corp. (Nasdaq:INTC - news), the world's largest chipmaker.
Intel's Craig Barrett last week suggested CEOs may refuse to certify financial results if stock option expensing was forced upon them. Barrett's comments marked the first time a major U.S. company had argued that civil disobedience could be a suitable response to such a rule.
On Tuesday, Chambers repeated his view that the current method for valuing them is not accurate. He said companies should disclose the dilution caused by options as well as have shareholders vote on all stock option plans.
Earlier this month, Cisco, the No. 1 maker of gear that directs Internet traffic, said it would grant stock options for about 75 million shares of its common stock to its employees.
During the booming market of the late 1990s, they were the favorite compensation for technology companies. With ever-rising stock prices, it was an easy way to attract or retain workers without actually having to pay them more.
Cisco has said 80 percent of its stock options are granted to employees below the level of vice president.
If options had been expensed in the quarter ended in January, Cisco's net profit would have been lower by almost a third, at $678 million, as opposed to a record net profit of $991 million, J.P. Morgan said in February.
Companies, particularly in the technology sector, have bitterly fought those efforts. However, a few have broken ranks, including Internet retailer Amazon.com Inc. (Nasdaq:AMZN - news) and software maker Computer Associates International Inc. (NYSE:CA - news)
Cisco's Chambers also said on Tuesday that the timing of an economic recovery remains uncertain. "Nobody knows when it's going to turn, but once it does it will be rapid, particularly in the technology sector," he said.
Chambers declined to comment on Cisco's April quarter. The company previously said it expects sales to be flat to down 3 percent from the previous quarter.
More on Samsung: (My summary - Profits down; Chip sales weak; Handset sales good @ 13 mill expected for 1st quarter, but ASP 2% lower.)
JL
SEOUL (April 14) - Technology giant Samsung Electronics Co. Ltd. is likely to report on Friday that first-quarter profits fell nearly 30 percent as prices for its bread-and-butter memory chips slumped.
No immediate relief is in sight, analysts said.
"Things will only get worse before they get better," said An Sung-ho, analyst at Meritz Securities. "We believe the average selling price for memory chips would fall further in the second quarter before it picks up in the third and fourth quarter as personal computer demand recovers."
Samsung is expected to post a net profit of 1.37 trillion won ($1.11 billion) for the three months ended March 31, according to six analysts polled by Reuters. That's down 28.3 percent from a profit of 1.91 trillion won in the yea-ago period.
Sales at the world's top memory chip maker are expected to have nudged up to 10.23 trillion won in the quarter, from 9.93 trillion won a year ago.
"The first quarter was pretty grim due mainly to poor performance in its semiconductor division," said Chong Kim, analyst at CLSA Emerging Markets. "But you have to bear in mind, it's been an extremely difficult period for all chip makers."
Weak PC demand in the wake of the global economic slowdown forced Samsung to cut contract chip prices almost every two weeks during the quarter to push products out the door.
The company's mobile phone business held up well, but its average selling price has slipped as the world's third-largest handset maker shifted focus to lower-end cell phones to further market share gains.
Samsung's diversified product portfolio has helped shield it from the global downturn, analysts said. The flagship of Samsung Group, South Korea's largest conglomerate, also makes televisions, refrigerators and washing machines.
WEAK CHIP PRICES
Despite a prolonged slump in chip prices, Samsung remains the only profitable major memory chip maker, while rivals such as Micron Technology Inc. of the United States and South Korea's Hynix Semiconductor Inc. have splashed red ink.
The average selling price for 256 megabit dynamic random access memory chips fell to $5.60 in the first quarter, down sharply from $9.00 a year before, analysts said.
But Samsung expects a recovery in chip prices in 2004 and plans to stick to its 5.7 trillion won capital expenditure for semiconductor business in 2003, Lee Yoon-woo, the president of Samsung's semiconductor business, told Reuters in an interview earlier this month.
Samsung plans to invest about 6.7 trillion won for the whole company, against 4.2 trillion spent last year.
A counter-cyclical investment strategy has proven effective for Samsung during the past memory chip industry downturns, resulting in market share gains and profitability.
But not everybody believes in the current investment plan.
"It probably won't announce any cutbacks this time around but we believe it would be better risk management for Samsung to boost its cash reserves at a time of global slowdown," said Jon Chong-hwa, analyst at Daewoo Securities.
Samsung, South Korea's largest issue with a market value of about $36 billion, has lagged the broader market by about five percent so far this year. The stock gained 0.7 percent to 287,000 won by midday on Monday.
HANDSETS HOLD UP
Samsung, known for sleek color screen mobiles with features such as cameras and voice dialing at the higher end of the market, is going into mid-to low-end markets such as India and China.
The move is expected to have helped Samsung achieve its first-quarter sales target of 13 million mobile handsets, compared with 11.6 million in the fourth quarter of 2002, but it will come at a price: Average selling prices are expected to have dropped two percent quarter on quarter.
Unit shipment growth over the past few years has been driven by a combination of innovative designs, cutting edge technology and aggressive marketing in Europe and the United States.
Samsung doubled its global handset share to 10 percent in two years, overtaking both Germany's Siemens AG and Sony Ericsson, and is now challenging mobile phone giants like Motorola and Nokia.
($1=1229.5 Won)
Rtr 00:14 04-14-03
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Tellabs (NASDAQ:TLAB - News) - SELL
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(Sorry for the "reply" post mschere. Couldn't find the "post new" process.)
mschere, Any clue yet from the Ericy Annual Report, and what story that might tell us?
And a question. What's the liklihood of a 3G deal already signed by Ericy, but pre-dated to coincide with the changing of the guard and the new CEO? TIA
I'll take $77.77
6,304 @ 19.54
Nokia warns, Ericsson plummets.
By Buster Kantrow
Of DOW JONES NEWSWIRES
STOCKHOLM (Dow Jones)--It's become a familiar pattern: Nokia warns, Ericsson plummets.
It happened again Tuesday, as Nokia warned that its first-quarter sales and earnings would be at the lower end of earlier forecasts. Its shares slipped, but Ericsson's tumbled, falling as much as 14% in an initial panicked selloff.
The reason? Nokia, as it has before, blamed disappointing demand from its operator customers, who it said continue to delay buying new equipment for their networks, and said its sales of 3G equipment were still cutting into profitability.
That's a small problem for Nokia, which gets 80% of its revenue from its still-thriving mobile phone business, but a big one for Ericsson, which is almost completely concentrated on the infrastructure market after hiving off its ailing phone business 18 months ago.
In case Ericsson investors didn't get the message, Nokia's chief financial officer drove the painful point home later, saying the Finnish company didn't think its feeble systems results reflected a loss of market share. "For the overall market, I would claim that it's been a very bad start for the year," Olli-Pekka Kallasvuo said.
The market exposure of the two companies is not entirely analagous. Ericsson sells equipment for more network standards than Nokia, but that hasn't been helpful in recent quarters.
The good news is that sales of gear for these other technologies has fallen so far that there's very little demand left to evaporate.
Ericsson has been furiously cutting costs to try to keep pace with the falling demand. It's on track to be below 60,000 employees by the end of the year and perhaps as low as 55,000. That's from a high of 107,000 two years ago.
Nokia's grim update, though, supports the view that the cutting may not be done if Ericsson means to return to a decent operating margin. The new chief executive, Carl-Henric Svanberg, who takes over early next month, should bring his knife.
Svanberg may also get a chance to take a fresh look at the company's forecasts for the year.
Ericsson said late last year that industry sales of network gear in 2003 could be around flat, compared with 2002. Its last forecast, in early February, was that sales could decline by up to 10%.
Expect that guidance to move lower still, another pattern that is all too familiar to Ericsson shareholders.
-By Buster Kantrow, Dow Jones Newswires; +46 8 54513091; buster.kantrow@dowjones.com
mschere, If you typed those last 2 paragraphs, you must have a little bit of Deutsche Sprach in your genes.
mschere: I can't open it. Can you summarize or paste the info?
mschere,
This one's very telling. HG is forecasting the future here. (Notice, what could be a "slip", when he says "that is, " not, "that will.")
Platina,
I'm glad you found your way over here. Your thoughts ( and your translations) will be warmly welcomed.
OT: Art,
Your welcome.
Here's Platina's translation of the second post containing Swedish.
Thank you Platina for your help. (Are all Norwegians rooting for IDCC, like you?)
: platina
10 Feb 2003, 05:32 PM EST Msg. 149386 of 149388
(This msg. is a reply to 149383 by JimmyLee.)
JimmyLee - Same thing:
bolaget anser sig ha en stark position i tvisten, något som får mothugg från Ericssons håll.
the Co regards itself to be in a strong position in the dispute,which hwvr, is countered by the Ericsson side.
(Voluntary Disclosure: Position- Long)
Brokentrade: Here is a translation of this post compliments of Platina from the RB board. His translation provides us with some new insights, including a positive response from KoP, a mention of the Harris results, and, the revalidation of IDCC's patents in Sweden.
I'll follow this with his translation of the other post containing a Swedish quote.
By: platina
10 Feb 2003, 05:26 PM EST Msg. 149385 of 149388
(This msg. is a reply to 149381 by JimmyLee.)
JimmyLee - Here is translation from the Swedish News Media: (I'm Norwegian by the way)
Patent dispute can cost
Ericsson Billions
2003-03-10
Ericsson patent dispute with the American Interdigital can turn into an expensive story. The American medias are speculating in a compensation (damages) of Skr. 20 to 40 Billion, writes Dagens Industri (Swedish Biz Journal)
(exchange rate: Skr. 8.5 = 1 USD: http://bors.nettavisen.no/index.php?go=dztitle )
The News Agency Direkt, have previously reported abt. the dispute which now has entered into its 10th year. It was supposed to go to trial at Monday next, but has been delayed until May 15th, DI writes.
The dispute is abt. patents within the mobile technology TDMA, in which Interdigital asserts that Ericsson have made infringements.
The American Co. now demands that Ericsson pays licence fees of 2.5 to 5 % of the sales of phones from the beginning of the ‘90's and 1.3 to 3.5 % of the sales of the Systems, for the same period.
A spokesman from Interdigital says to DI that the Co regards itself to be in a strong position in this matter, which hwvr, is countered by the Ericsson side.
‘'We claim that Interdigital patent is null and void (invalid) and that we have not infringed in the patent', says Ericsson spokeswoman in USA, Kathy Egan to the paper.
(My comment. How can U first say that the patent is invalid and next say that U hv not infringed into something that is invalid ??????????)
There are, hwvr, things that speaks against Ericsson getting out with a result, in their favour, in this dispute, writes DI further.
In a similar case, the telephone Co Harris, a couple of months ago, convinced a Jury, that Ericsson had infringed on its' patent.
Ericsson have even tried to make Interdigital's patent declared invalid, amongst others in Sweden, but they failed. (Direkt)
(Voluntary Disclosure: Position- Long)
mschere,
Here's the news release from Ericy connected to my Streamer.
A completely different, and lo-ball spin IMO. Note: "several billion vs 10s of billions," "a patent" vs "8 patents!"
Pure Damage Control!
STOCKHOLM (Dow Jones)--Telefon AB LM Ericsson (ERICY) may have to pay several billion Swedish kronor in damages to U.S. telecom company InterDigital Communications Corp (IDCC) in a dispute over a patent for the mobile phone standard TDMA, Dagens Industri reports.
GoldDragon's Response:
Post new msg. Email this msg.
By: GoldDragon
08 Feb 2003, 05:38 PM EST Msg. 149308 of 149310
(This msg. is a reply to 149307 by JimmyLee.)
JimmyLee ....
After reading your remarks, I sat back and tried to remember exactly what Rip said (vs. my impressions). Therefore I will restate my memory ...
Rip indicated that they have been in conversation with Nokia and that those talks are continuing. He also stated that Ericy or any other major client could end up setting a benchmark (my word) rate for everyone. I think it was my impression from the overall conversation that Nokia is not in any great hurry ... and Rip did not seem overly concerned with the passing of time since he pointed out it is retro-active anyway. Rip also kept focusing on cashflow as a major goal of the company at this point (vs. profitability) until 3G kicks in, because he said this is where IDCC will begin seeing greater profits.
I hope this is helpful, as I was just attempting to recall what was said and how the overall conversation went.
GoldDragon
More from Gold Dragon.
My problem is (with my HiLited lines.) Is this Gold Dragon's spin, or a further extension of Rip's remarks?
I'll try asking Gold Dragon about this.
GoldDragon
08 Feb 2003, 04:48 PM EST Msg. 149306 of 149306
(This msg. is a reply to 149298 by DonnKing.)
The impression I got was that any one of these major clients that you mention could end up setting the payment rate to IDCC. It sounded like Rip did not think Nokia wants that to happen and most likely will be the first one to agree to a rate (so they can determine their own destiny). However ... they apparently are not in any hurry to do so ... and probably will continue to delay until Ericy appears closer to settling. Rip did say IDCC is willing to settle the case outside of court with Ericy if a reasonable agreement can be reached.
GoldDragon
Loop, (from RB)
This is a "rough" summary by "Gold Dragon" on his recall of Rip's comments after the Emerald show. (See particularly #3 on "Insider Trading" response. I also think Gold Dragon is referencing Tantivy in #6.)
: GoldDragon
07 Feb 2003, 05:01 PM EST Msg. 149294 of 149296
(This msg. is a reply to 149270 by DonnKing.)
IDCC Emerald Presentation ...
I was late getting to IDCc's forum presentation, but did have the opportunity to sit in on the discussion in the ajoining room after Rip's presentation. Here are some of the things I remember being said:
1) Officially ... China is still not recognizing outsider intellectual properties, however they are beginning to acknowledge it privately. Rip stated that he believes over time, that they will change their stance.
2) 2G rate is between 1 to 3%, and 3G should come in slightly less than that. No 2G revenue from Motorola is anticipated (due to the previous court case), however there is potential for 3G.
3) Insider trading issue ... Rip said all employees of the company receive options, and they have limited times in which to sell. To date, the company has not produced a scheduled window of opportunity to sell, but they may consider that in the future. Rip pointed out several times that these options are part of their compensation package, and that it is no reflection of employee opinion on the future prospects for the company's performance (either good or bad). He said ... why give options out to employees if they can't exercise them? Rip pointed out that employees have expenses just like the rest of us (ie: taxes and college expenses). I felt he made an excellent point. Also ... he said the chairman has taken no salary, subsequently he gets compensated through options.
4) IDCC should receive retro-active compensation from Nokia as of January 1st ... but the rate percentage is yet to be determined. Should IDCC settle on a rate with another large client, then a benchmark would be set for Nokia. I did not get the impression that Nokia would want that to happen ... so I feel they will come to the table prior to such a situation occuring (just my take on this part of the discussion).
5) Rip talked about the company's goal of generating positive cash flow vs. profitability at this time. I believe this point was stressed because the company's true future of profitability rests primarily on 3G income (vs 2G). He talked about the burn rate but I don't have my notes with me ... and that they have close to $100 million. I just remember thinking the company can go on for a looong time before a cash crunch would occur.
6) Rip tallked about wide-band capabilities, and that most of the world (think he said 80%) would be using it. He did acknowledge that the remaining 20% is still a sizable chunk of business, and that was a major reason why they decided to purchase another company not to long ago (don't remember the name) so they would also be a player in part of that business as well.
7) Regarding Ericy ... the question was raised about their ability to pay even if IDCC should win. Rip said they can't focus on that very much, because this case has a long-reaching effect on other companies that are closely watching the outcome. He seemed to think there was a good chance that no matter the outcome, that the final ruling would probably be appealed, so it looks like this 10-year case will most likely continue for some time. He stated that the reason for the recent court delay was due to the judge's age, and that the judge was passing on his workload to other judges. The new judge therefore needs some additional time to become familiar with the case. Rip said that the trial is with a jury ... and that you never know the outcome. A conversation then focused on the benefit of a Master's hearing ... and what I took away from the conversation is that the Master looks at the validity of the case, so that the jury can therefore focus on things like the final award.
PLEASE keep in mind that I am not a professional stock analyst, nor overly knowledgable as many of you other posters are on IDCC. Although I have a sizable position in the company (at least it is to me), I am attempting to convey as accurately as I can what was discussed. Also ... I don't get much time to come on Raging Bull, so please don't get offended if you respond with questions and I don't get back to you. Hope my impressionns are of interest ...
GoldDragon
(
More Ericy Bad News:
(From the RB Ericy Board.)
HaraldBlaatand
03 Feb 2003, 02:44 PM EST Msg. 25878 of 25879
(This msg. is a reply to 25875 by EUSTexas.)
Has anything been mentioned
about the payment to the employees who in 1997 'loaned' money to the company?
It's due in June. I think it comes to around 4 billion kronor...
JL
To All,
On the subject of options. There is a 3 page article in the 1/20/03 issue of Business Week entitled, Stock Options - The Right Way to Go. The article is adapted from the new (2003) book, "In the Company of Owners: The Truth About Stock Options (And Why Every Employee Should Have Them.)"
I typed a long post summarizing the charts and the text, (took me about an hour,) only to see it disappear when I hit preview. I recommend it to all who are interested in pursuing the debate that has been raging on this board for weeks.
A couple of points/quotes from the article:
The thesis is: Despite widespread CEO abuse, option grants can still be a powerful motivational tool for the entire workforce.
The authors report, "At more than 130 major companies, investors furious about widespread option abuse plan proxy fights, aiming to curb runaway executive option packages."
And, my personal favorite substantiated by years of consulting across different organizations:
"At the same time, many CEOs act as if theyand a small cadre of executives and managers are the only ones who might be motivated by corporate ownership. Yet there's plenty of evidence that companies perform better when regular employees are owners. Employee ownership lifts a company's productivity by four %age points and total shareholder returns by two %age points, according to our analysis of more than 70 economic studies done on the subject in the past two decades. Conversely, there's little proof companies perform better as a result of the gargantuan ownership that executives have claimed for themselves."
JL
Danny,
Ditto
JL
mshere and Mickey, Thanks for the refreshing On Topic posts. It's nice seeing some posters return to a discussion about our stock, and my retirement investment.
Loop - pls return with your knowledge and insights. You've been one poster that I follow, read, and re-read. Then, I forward what you explain to me to others that I've interested in IDCC. Losing you and your contributions, would be akin to having your favorite professor and mentor resign their position.
And Jim Lurgio - I'm truly looking forward to meeting you. Your leadership across all of these past boards, has been inspiring. Don't get down on yourself for being human in your spat with Mickey. You're both made of the stuff that will ultimately do the right thing, - for each other, this board, and our stock.
JL
Bob,
That solution would work fine for me.
JL
Microsoft's new phone has a few problems
By Nic Fildes
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--Microsoft Corp.'s (MSFT) move into the mobile phone market has created a product with features few competitors can match.
Here are some: a handset that keeps freezing up and may take three attempts to get it running again, can randomly ring numbers from the address book, and has a battery that can expire without notice.
It's common for any new mobile phone to have teething problems, but the SPV, a phone using Microsoft's software and branded by operator Orange SA (F.ORA), is one of the most-scrutinized new mobiles on the market.
The Microsoft Smartphone 2002 software used in the SPV - which stands for Sound, Pictures, Video - is a cut-down version of Microsoft Windows aimed at the fast-growing market for upmarket phones.
Launched in October, the SPV is the first phone anywhere to be powered by Microsoft Smartphone software, the company's attempt to muscle into markets dominated by Europeans such as Nokia Corp. (NOK). It offers e-mail, Web browsing, and many other functions usually handled by a personal computer.
But one owner of the phone on an Internet chat room had some advice for customers interested in the phone.
"Do not go anywhere near an SPV. I am on number five now and still (have) problems with reception - i.e. none. (The) phone locks ups and the battery life is hard to push past 24 hours... Anyone want to buy a SPV? This one does work but I am not interested in this phone anymore," he said.
He's not alone. Other common complaints that have users seeing red - or at least Orange - include its "atrocious" battery life, freezing up when locked, poor reception, problems turning it on, phones randomly dialing numbers stored in the address book, the reliability, usability and speed of the handset and a slightly orange tinge to photos taken with the camera, which could conceivably be a unique form of subliminal advertising.
In the U.K., the phone is priced around GBP130 if the customer signs a monthly contract. It's also available in France and some other European countries in which Orange operates.
"I have heard some customers say there are some problems, like the phone locking up from time to time," said a staff member at a London branch of Carphone Warehouse Group PLC (U.CWH). But he said demand is strong, the branch had no stock left, and there were no returns.
An Orange SA (F.ORA) spokesman conceded there were some software problems, but that some could be fixed with a software update to be sent over the airwaves within two to three weeks.
"We're very happy with the phone," he said, adding that only a few customers had complained.
The complaints, which have risen as the phone has become more widely available in the past month, come on the back of the discovery of security cracks in the SPV's system. The problems threaten Orange's attempt to set up the phones to run only software approved by Orange, to combat viruses and ensure Orange can get a slice of software revenues.
Gartner Dataquest analyst Ben Wood said Microsoft's teething problems are to be expected, but there will be a cost?
"This leaves a really bad taste in some consumers' mouths," Wood said.
He said Orange made a leap of faith by being first to release a handset built on the Microsoft software.
Although there have been problems, sticking with the software may pay dividends in two to three years, when in Wood's view entry-level handsets will have capabilities now found only on personal digital assistants.
Despite the ease with which Orange can amend the bugs appearing in the SPV system, Wood said, "The consumer who walked into Dixons (a major retailer) and bought one of these phones didn't expect to have to update the software over the year."
Company Web site: http://www.orange.com
-By Nic Fildes, Dow Jones Newswires; 44-20-7842-9264; nicolas.fildes@dowjones.com
JL
Loop,
You're posts are salient, as well as witty. I thought so much of this one that I forwarded to the gang that has followed me into IDCC. Here's my preamble (compliment) to your post.
JL
Folks,
Loop has been in this suit from the beginning (including the Motorola trial fiasco.)
He gives us here his thoughts and feelings about the suit and our chances, in light of all the exhibits and information that have come to light. Particularly, the summaries just provided by LARanger (that I just sent you.) It's a refreshing read. Makes me want to buy some more on Monday. Can you say the word "settlement?"
Jim
JL
JKJ,
My friend, you are above and beyond the pale. Between you, Ronny, Loop, parq, DD, Mickey, Jim, and so many others, every reader on this board owes you all big time, for your hard work and many contributions.
JL
OT Boogie, Who's your broker. Transaction fee of $5 bucks is pretty good.
JL
OT: In case you haven't looked recently, the RB board is like a wasteland. DonnKing and MarketMaker are among the very few left talking at one another. If you've got a minute, go take a look. It's a real nostalgia trip.
Imagine if you'd been gone on vacation for 2 weeks and missed Jim's invitations. You'd think a bomb hit over there.
JL
Bob,
I don't know how to cat and paste it. I'll try though.
So far, I only see the error message when I bring up a new message.
Jim
JL
Matt,
On every post I read, I get an error message Saying "run error. Do you want to debag? Yes? No? Line 25 Error- Invalid Character.
The Error Message is the same on every post. And, I must click Yes or No before I can move on.
Help! How do I fix?
JL
JL
JimL,
JimmyLee is in and awaiting the rest of the gang.
JL