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mschere.
I am not familiar with the Samsung dispute resolution procedure, but the NEC agreement contains the following:
"senior executives of the parties with
decision making authority will meet in Wilmington, DE, Tokyo, Japan or such
other city as may be agreeable to the parties as soon as reasonably
possible (but no later than sixty (60) days after notice) and will enter
into good faith negotiations aimed at resolving the dispute. If they are
unable to resolve the dispute in a mutually satisfactory manner within an
additional sixty (60) days, the matter may be submitted to mediation and
arbitration as provided for below."
If the Samsung wording is similar, it is possible that there is a 120 day period i.e. 60 days to meet, then 60 days to negotiate, to resolve the dispute before going to arbitration. Therefore, the dispute resolution period could extend into Jan, and I am sure whatever happens in the court hearing would be an important factor during the discussions.
Motley Fool Article
7 Wireless Plays Plus Dell
Wireless has defeated fixed landlines, but services, not the network, will deliver long-term rewards. Place your bets on potential winners among Nokia, Microsoft, NTT DoCoMo, Vodafone, Qualcomm, Palm's PalmSource, and Electronic Arts. But consider a possible Dell surprise.
By Tom Jacobs (TMF Tom9)
October 28, 2003
Are any of you like me -- fascinated by the potential of wireless to reward investors, but still free of a mobile phone? Of course, this is an option for those few with access to dependable, low-cost landline service and jobs and love lives not dependent on mobile access -- even if they require online availability. Ahem.
But I am soon to be a dinosaur, if I'm not one already. When The Economist surveyed telecom after the bubble, it looked at three main trends. The first governs all else: Mobile phones overtook fixed-line phones in 2002 for the first time. Makers of wireless handsets sell 450 million phones a year. Total users are projected to grow from 1.3 billion to an estimated 2 billion in 2007. Wireless will be All.
Consumers benefit. Killer competition in manufacturing and service lowers prices weekly. But what may be good for us ain't necessarily good for our providers. In this cutthroat environment, where is the future for investors in Nokia (NYSE: NOK), the world's largest handset maker at 40% market share, and competitors Motorola (NYSE: MOT), Ericsson (Nasdaq: ERICY), and Samsung?
The Economist answers "services." Here's why, with some investing options and then a surprise conclusion about Dell (Nasdaq: DELL).
Subscriber growth fuels profits, but not indefinitely
Parts of western Europe and the more developed areas in Asia already boast 80% wireless penetration, leaving little room for growth in new subscribers. There's still room in the U.S. with 50% penetration, because dependable fixed lines serve people like me, and in such places as eastern Europe and developing Asia.
The real growth will come where the people are. An estimated 60% of new mobile-phone subs in the next seven years will be in China and India. China today has 200 million subscribers, adds 5 million a month, and still has only 18% penetration. Service is exploding in India and stands at but 1% penetration.
You might think that in these countries low incomes preclude wireless service, but the record proves otherwise. And necessity is the mother of invention. Among even the most destitute, such as in the sub-Saharan nations, users pool resources to share a phone and prepaid cards supplant the need for a credit infrastructure.
A wild-eyed guess is that handset makers can continue creating models for all price ranges and keep investors happy for another few years -- five to 10? -- but will need more than that for a sustainable future. No surprise to anyone that we're talking about data services.
3G was a disaster and failed
Remember the promise of the "Coming of 3G" -- third-generation mobile telephony bringing high-speed wireless data capability? The medium would be enough, and nothing rang louder than Qualcomm (Nasdaq: QCOM) and Nokia investors arguing the superiority of various network technologies -- CDMA, WCDMA, GPRS, EDGE, and the entire alphabet soup (here's how it looked to us in 2000).
Telecoms bid billions for 3G licenses to build and operate those networks, but today they have written down their value and even returned them to the vendor governments. The only commercial European 3G service is Hutchinson's. According to The Economist, it was a classic "build it and they will come" mentality. 3G would do everything but make your lunch. Instead, it ate its own providers' lunch.
Today, operators offer 2.5G networks allegedly from 40 kbps to 100 kbps and will quietly migrate to 3G and its greater speed and capacity. Users won't know or care. What network providers devoutly wish is that subscribers will care and pay for services on the faster networks.
It's the services, stupid
What's saving providers today is the success of text messaging. Who knew? U.S. residents send the fewest per month -- seven -- so we may be forgiven for missing this phenomenon. But everybody else is texting 'til they drop. Singaporeans send 250 a month, and the average worldwide is 30 per subscriber. According to The Economist, users send 1 billion text messages a day at 10 cents, for about $40 billion a year. Holy moly! Texting revenues account for 20% of some operators' revenues at a time when fierce competition is lowering charges.
Texting is a start, but mo' money is about bundling services. Mobile phone operators offer a souped-up handset with a color screen, usually a camera, and bookmarks and menus directed to downloading games and accessing information, for a monthly fee. Do NTT DoCoMo's (NYSE: DCM) i-mode service and Vodafone's (NYSE: VOD) live! bring higher revenues? Vodafone says live! monthly bills are 7%-10% higher than others, but it's just the start. Time will tell.
The regular A.T. Kearney and Cambridge University survey of 5,600 mobile phone users in 15 countries shows 43% own an Internet or WAP-enabled phone (WAP is the failed wireless access protocol), and that 34% have surfed the Web from their phones, up over 25% from last year. And all this alleged game playing on phones? Worldwide, 6% of users have downloaded and played games -- double last year -- with 10% in the U.S. and 15% in Brazil.
How to play it
The wireless world is about convergence -- of devices, of telephony and Internet Protocol, of voice and data and entertainment and business. Today -- and certainly someday when the hardware's as cheap as plain old telephones are right now -- the high margins reside in entertainment software and gaming subscriptions. This is why Nokia reorganized to emphasize this, introducing the N-Gage portable gaming device. Nokia leads for now in wireless but is joining the video game console world of Microsoft and Sony (NYSE: SNE) -- and their online gaming ambitions, too.
Investors have three broad choices. They can bet on wireless software or hardware infrastructure (not the handsets, but their network guts) and hold a Nokia, Microsoft, Palm's (Nasdaq: PALM) soon-to-be spun PalmSource, or Qualcomm.
Or they can own a Nokia or Microsoft expanding into the gaming and entertainment universe, or perhaps one of the network providers like NTT DoCoMo or Vodafone betting on success in bundling. Each of these companies has other businesses to cushion their new forays.
Third, investors may eschew companies with legacy wireless businesses and take on more risk for more potential reward. This means buying shares of the now-profitable video game software makers Electronic Arts (Nasdaq: ERTS) (richly valued) or Activision (Nasdaq: ATVI) (more of a bargain). (Electronic Arts investors sure benefited from David Gardner's recommendation in Motley Fool Stock Advisor.)
Dudes and Dells
But there is another choice. For those fixated on the gadgets, the mobile phones, I predict that within five years, Dell will be one of the top two, if not the leader in wireless handsets -- whatever they will be called or look like then. It's well on its way, destroying prices with its PDAs and going full tilt on consumer electronics. Doubters have dogged Dell at every doorway, as it took over PCs, then servers, printers, and now consumer electronics, but Dell will be the phone leader. Count on it.
Given that I believe investing is all about calculating risk vs. reward in a world where nothing is certain, I hate predictions, but I'll stick by this one. Agree or disagree on our Dell board, and check up on the company in Dave Marino-Nachison's latest take.
Riga, Paris of the Baltics
I'm writing this from the capital of Latvia, Riga, often called the Paris of the Baltics for its parks, canals, Daugava River, and art nouveau architecture that rivals Vienna's. Winter may have arrived Sunday with six inches of snow, but the place bustles. Following its independence in 1991, the country's GDP really took off starting in 1995, and today much activity anticipates the country's European Union entry next May. Twenty-year-old real estate agent Edmonds Lacis tells me that commercial rents today in Riga's Old City are the same as Stockholm's.
I read that 50% of the university students study information technology. Their world takes for granted what still amazes me: You would have no idea where this is written or sent from, nor does it matter. Logistically, I need only ensure that I'm available to our most excellent Foolish editors during their rush hours, and IM and email make that a breeze. Ain't technology grand?
Have a most Foolish week, and thanks for reading! To receive an alert when my weekly column is published, please email me with "mailing list" in the subject line.
Tom Jacobs (TMF Tom9) owned a wireless phone once, but refuses to do so again until service improves and costs decrease even more. He is not a Luddite. At press time, he owned shares of Microsoft and Nokia. To see his stock holdings, view his profile, and check out The Motley Fool's disclosure policy.
No big deal about 8K reported today. A comparison of today's agreement against the original agreement reported Feb 21, 2003, and the first revision reported Jul 2, 2003, disclosed the following minor revisions/corrections.
The Feb 21 report had redacted NEC's address and the name of the NEC official who signed the agreement. This information was included in the Jul 2 document.
Although the Jul 2 document no longer included any redacted information, it contained an introductory statement that confidential portions have been redacted and separately filed. This statement was excluded from the latest document.
I guess the lawyers want to make sure that the documents contain no incorrect information.
Morgan Stanley downgraded its rating on Ericsson to underweight and cut its price target on the stock to SKr 4. "As the market leader and most exposed among the Telecom Equipment stocks to wireless infrastructure, we see Ericsson as a key loser from our bleak industry outlook," the broker said.
mschere, Thanks for the cite, Anything that helps my technical education is appreciated.
Eneerg. Thanks, Except for the NB-430TS, the other base stations listed in your message, and the Radio Network Controller (RN-750) are shown as joint products on separate brochure type web sites from both Siemens and NEC. I raised the question because I am still not that familiar with all the technical differences between the different systems.
ENeerg: Siemens supposedly has come up with the first TD-SCDMA base station (product number NB-430TS). Would you know if this comes under the Siemens-NEC JV for UMTS, or was it independently developed?
Eric. this comment from the annual report should answer your question.
In the third quarter of 2001, Nokia and the Company amended the agreement by refining the pace and scope of the development arrangement and Nokia committed to increase funding to a maximum of approximately $58 million, up from the original estimate of $40 million. We will be responsible for costs not covered by the maximum funding amount. This modification was treated as a new contract for accounting purposes and as a result, we changed the method of reporting revenue related to the remainder of the program to the percentage-of-completion accounting basis. Prior to the change, revenue had been reported on a time and materials basis and we had billed Nokia approximately $46 million under the contract, leaving approximately $12 million of revenue to be recognized on the percentage of completion basis. Of the $12 million, approximately $4.6 million and $6.2 million were recognized in 2002 and 2001, respectively. During 2002, we accrued a loss of $1.2 million on the modified contract based on our estimates of cost to complete the contract. The final $1.0 million payment associated with this contract will be withheld until final delivery of the remaining technology required under the agreement has been made. We currently expect final delivery to occur in the second half of 2003 and will defer the recognition of the final $1.0 million of specialized engineering services revenue associated with the agreement until that time.
my3sons87: payment was received. Revenues from the settlement are being recorded monthly over the period from Jan 02 thru Feb 06 at approximately $1.06M per month.
"The positive operating cash flow in first half 2003 arose principally from net receipts of approximately $68.0 million from patent licensing agreements. This included approximately $29.0 million from Ericsson and Sony Ericsson, $26.4 million from NEC Corporation of Japan (NEC) associated with our 2G and 3G license agreements"
arthritis60. Actually in my prior life my background was more in the financial area rather than technology. In fact, before I started looking at IDCC my knowledge of wireless was limited to knowing that there were basically two systems in use, i.e. US and most of the rest of the world. I didn't even know the names or acronyms of the two systems. I still have to use a reference table I made when some of the various system acronyms are referred to. The board postings have also proved very helpful in getting a basic background.
It is hard to analyze IDCC as it has a rather unique business model. Its' dealings with a limited number of very large companies, as we know , can cause unexpected problems. As I noted once before, I consider IDCC to be a "special situation" stock that could react without regard to overall market conditions. What I find intriguing, is that a favorable resolution of the Nokia/Samsung arbitration, and some unanticipated news regarding 3G licenses could send the stock soaring. Other posters have commented on this, but the general public and big institutions apparently are waiting for things to be resolved before investing. As I said, i've just started building up a position.
rmarchma
Busy today. Your comments are correct. To add to them, volume discounts may also be computed with the prepayment discount, and the discounts only apply to infrastructure sales in Japan.
arthritis60
I like to build up a position over time. This past week I started nibbling and picked up 2000 averaging just under $16.
mschere.
I also thought of that.
Since the article was dated July 2003 and they used the verb "will" deliver, I assumed it was a misunderstanding. Especially since 3/4 of FY 04 is in CY 03.
Just to add a comment to my last message.
The licensing agreement calls for royalties on infracture units (as previously defined), not just base stations.
"ii. For Covered Infrastructure Units compliant with
Narrowband CDMA and Third Generation, [**]% of the
Net Selling Price of each such product sold by Licensee and/or its Affiliates;"
rmarchma
<<I'm not sure, but I think that IDCC only receives royalty on the basestations, and not on all the other associated infrastructure system products. Perhaps someone more technical than I can shed some light on this issue.>>
As you say a technical person is probably needed, but for your info the license agreement defines infrastructure as:
"Infrastructure Unit" means mobile switching centers, radio network controllers, service nodes, Node B's, base stations, radio resource management devices and software, base station controllers, digital transceivers, digital channel cards, and software necessary to operate the aforementioned devices (including software maintenance agreements to the extent that free upgrades are provided in exchange for the maintenance fee, or to the extent that the software maintenance provides an upgrade or enhancement as to functionality), whether sold as individual items or bundled as an integrated product, which is used to interconnect a Covered Subscriber Unit to a public or private data or voice network (whether wired or unwired), including the internet. Subject to the foregoing, absent some substantial difference in design and/or function of Infrastructure Units, the parties agree, generally, the interpretation of Infrastructure Equipment and Net Selling Price (as defined in the Prior Agreement), and used in the arbitration, including for audit purposes, shall generally be considered acceptable guidelines in determining the royalty base hereunder.
rmarchma
Thanks for the explanation regarding the delayed billings. I thought they might be doing something like that when, during some other research, I noted this comment in 2Q03 10Q report: “and $2.3 million of royalties from first quarter sales of 3G products by NEC that were recorded in the second quarter upon receiving an update from NEC on their previously provided first quarter royalty report.”
I agree with you that for items such as a base station, the sale is probably not recorded until after it has been installed, tested and accepted by the customer. However, since royalties are based on the invoiced amount, I think it would be stretching it a bit to wait until payment is received before reporting the sale.
In regard to the 24,000 base station figure it was made by Rudi Lamprecht, a member of Siemens' executive board and the head of mobile communications. As you noted, it showed up in a recent Siemens press release and other publications. However, according to a recent Nihon Keizai Shimbun statement, NEC says it will deliver 5000 3G base stations globally during its fiscal year of 2003, therefore, IMO the 24,000 figure appears high.
http://www.mobile.commerce.net/story.php?story_id=3250&s=7
Just one last thought, the revenue decrease in infrastructure sales reported by NEC tracks industry experience as reported by In-Stat/MDR. This makes the large Siemens increase even more suspicious.
http://www.instat.com/press.asp?ID=763&sku=IN030915GW
I am new to the board, but from what I have seen, he has kept it one of the best boards around. I join all in wishing for a swift recovery.
mschere
Just a couple of points regarding royalty computation
Rather than $1.5 B for the six month period, based on the average $/Yen conversion used by NEC in reporting their revenue, the amount would be approx $1.42B.
In regard to what royalties are due IDCC , I have no idea what the royalty payment rate may be. In other posts a dollar amount per base unit has been used for calculation purposes; however IAW the the agreement it is an unstated percentage of net selling price (invoice price), with apparently different rates for sales within and outside of Japan. Based on your use of $30M against $1.5B you are using a 2% rate, which may or may not be accurate.
"ii. For Covered Infrastructure Units compliant with Narrowband CDMA and Third Generation, [**]% of the Net Selling Price of each such product sold by Licensee and/or its Affiliates; provided, however, that for sales of Covered Infrastructure Units in Japan only, for sales occurring on or before December 31, 2003, the royalty rate shall be [**]%. For sales of Covered Infrastructure Units occurring on or after January 1, 2004, Licensee shall have the option to pre-pay
additional royalties for Covered Infrastructure Units for use in Japan only, at any time, based on
Licensee's good faith projection of its sales of such products over a one (1) to three (3) year period(s). Such pre-payment shall be paid to ITC prior to the start of the royalty period used in determining the pre-payment amount. Licensee's actual payment to ITC for such royalty projection shall be discounted at [**] % per annum, to reflect the time value of money over the selected period. In addition, the optional pre-payment shall be further discounted by the following single volume discount, applied to the present value amount, as follows:
Volume Discount Years Pre-paid
1 [**]%
2 [**]%
3 or more [**]%
The projected royalty shall serve as the royalty
credit, against which Licensee can at any time offset its royalty obligations as to Covered Infrastructure Unit for use in Japan only, until that royalty credit is exhausted."
mschere
If you look at the bottom of the chart, you will see that the bars represent halves (first half/2nd half) of the FYs, not quarters.
mschere
If I am looking at the same item, I see 176.9B mobile infrastructure sales for a half year not a quarter.
Mschere
<<or the shipped basestations are not being recorded as "sold" until a later date ie time lag,>>
The problem in reconciling IDCC’s quarterly reported royalty revenues for NEC with publically reported numbers of NRC’s sales may be due to the fact that there apparently is a one quarter delay in reporting revenues.
According to the SEC form 10K, although in some cases IDCC may accrue royalty revenue based on estimates, they generally recognize revenue based on royalty reports received from the licensee. According to NEC’s 3G licensing agreement, NEC has up to 30 days after the end on the quarter to submit a preliminary royalty amount, with the final royalty amount AND paymment due 45 days after the end of the quarter.
I don’t know whether NEC’s royalties are recorded on the accrual or actually reported basis, but since IDCC states that they generally use the actually reported basis, you could assume there would be a one quarter delay.
(IDCC Form 10K)
Royalty revenue is recognized as earned in accordance with the specified terms of each license agreement, most of which provide for quarterly or semi-annual reporting of royalties due InterDigital. We generally recognize royalty revenue as earned based on royalty reports provided by our licensees. In some cases, royalty revenue is accrued prior to formal reporting by licensees when reasonable estimates of such amounts can be made. These estimates are based on both the historical royalty data of the licensees involved and currently available third party forecasts of royalty related product sales in the applicable market. When our licensees formally report royalties for which we accrued revenues based on estimates, we adjust revenue for the period in which the reports are received.
NEC 3G License Agreement
Payments/Reports. All payments required under this 3G Agreement shall be made by wire transfer to the following bank account of ITC in U.S. dollars on a quarterly basis within forty-five (45) days after the end of each calendar quarter
..................
Each payment made within the required 45 days, described above, shall be accompanied by a written report and associated certification by the responsible personnel of Licensee, setting forth the amount of the royalties payable and calculation thereof for the reported period. To assist ITC in preparing necessary earnings reports, Licensee shall also develop some form of advance royalty projection mechanism whereby Licensee, on a non-binding basis, shall advise ITC, by no later than thirty (30) days after the end of each calendar quarter, of the aggregate (i.e., not on a product category basis) royalty amount Licensee anticipates reporting for the subject calendar quarter. All such reports shall be held in confidence by ITC.
NEC Posts Strong Quarter, Raises Outlook
Thursday October 23, 4:24 am ET
TOKYO (Reuters) - Japanese chips-to-computers conglomerate NEC Corp said on Thursday it swung back to a quarterly profit, boosted by a hefty contribution from its chip affiliate and brisk sales of mobile phones.
Citing a strong earnings boost from the chip unit, NEC raised its full-year pretax and net profit forecast 33 percent to 160 billion yen ($1.47 billion) and 40 billion yen, respectively.
"Here's an example of a company that has made some significant strides in restructuring itself," said Marc Desmidt, head of Japanese equities at Merrill Lynch Investment Managers.
NEC pressed ahead with its cost-cutting drive while pocketing hefty profits by listing its semiconductor and software development units in the latest quarter.
NEC, the first major electronics conglomerate to announce results for July-September, was expected to outdo rivals Toshiba Corp, Hitachi Ltd, Fujitsu Ltd, and Mitsubishi Electric Corp mainly because of its booming mobile phone business and cost cuts.
"I think this is more of a company specific thing. Again, the hope is that if NEC, not unlike Nissan (Motor Co Ltd can prove that restructuring works, then hopefully you'll see some of their rivals do it as well," Desmidt said.
NEC's July-September group net profit totaled 14.8 billion yen ($135.8 million), compared with a net loss of 6.19 billion yen in the same period a year ago, when it was hit by a prolonged semiconductor slump. It made a profit of just 700 million yen in the April-June quarter this year.
Sales for July-September rose 8.6 percent to 1.25 trillion yen.
NEC reaped a 37 billion yen profit by selling part of its holding in NEC Electronics Corp when the chip affiliate listed in July. NEC still owns a 70 percent stake in the company, so the chip maker's 65 percent jump in quarterly profit on brisk sales of microcontrollers and liquid crystal display (LCD) drivers contributed heavily to NEC's bottom line.
NEC, Japan's biggest telecoms equipment manufacturer, also saw brisk demand for its mobile phone handsets this year. It boosted its domestic cellphone shipments by 60 percent from a year earlier to 6.08 million units in April-September, thanks to the popularity of photo phones made for NTT DoCoMo Inc, a research firm said on Wednesday.
NEC and Matsushita Electric Industrial Co Ltd, maker of the Panasonic brand, are core handset manufacturers for DoCoMo, Japan's dominant wireless operator.
As the camera phone boom spreads from Japan to the rest of the world, Matsushita and NEC, the world's seventh- and eighth-largest cellphone makers, are also expanding overseas sales.
Another earnings booster for NEC, Japan's largest personal computer maker, was recovering PC demand.
Japanese domestic shipments of personal computers rose 24 percent in the July-September quarter, helped by companies replacing aging systems and consumers wanting new computers with television and DVD functionality.
With its second-quarter earnings and revised full-year forecast announced, investor focus is expected to shift to its mid-term management strategy meeting slated for next Thursday.
Shares in NEC have gained 40 percent in the latest quarter, outperforming the Tokyo Stock Exchange's electric machinery index IELEC, which rose 12 percent.
Prior to the announcement, NEC shares closed down 5.48 percent at 880 yen, compared with the electric machinery index's 5.06 percent slide. (Additional reporting by Yuko Inoue, Daniel Hauck)
OT: quartzman0, Thanks for listing that site.
When I read the original message, my reaction was to search the web for "Merv Grazinski" (the Winnebago case). All I found on Google were 988 cites which appeared to be just a repetition of the cases cited.
Mass deployment of 3G not seen until 2007
Silicon Strategies
10/21/2003, 9:50 AM ET
CEDAR KNOLLS, N.J. -- Third-generation (3G) wireless networks are just getting off the ground in some nations, but the mass deployment of this technology will not be felt around the world until 2007, according to Probe Group LLC.
Probe Group believes that 2.5G networks will push out the need for 3G. In fact, 2.5G networks are giving carriers an opportunity to judge just how much subscribers are willing to spend on non-voice and non-SMS services, according to the Cedar Knolls-based research firm.
So, the point at which 3G networks will have sufficient customers to make its presence felt by global markets won't come until some time in 2007. That date is significantly more pessimistic than previous Probe forecasts.
"On the 3G 'battlefield' carriers might regard 2.5G the way any commander regards the weather: having the potential to become a powerful ally or a remorseless enemy," said research director David Chamberlain.
However, delays in commercial deployments of 3G networks and handsets do not suggest the failure of this technology, according to Probe Group. "At this time, we should be practicing the same patience being demonstrated by the carriers and a growing number of regulators," he added.
Outside the Americas, Probe believes 3G will ultimately become the dominant mobile network in the future.
OT: TFWG. I had found the polite form of that acronym, but I didn't relate to it.
BUFF Big Ugly Flying Fellow (USAF B-52 Bomber, polite form)
An Interesting Article
Vodafone is stepping up to impose order on the jumble of incompatible phone standards -- a move the industry badly needs if it's to grow.
http://yahoo.businessweek.com/technology/content/oct2003/tc20031017_7768_tc130.htm
The arbitration process appears to still be proceeding in accordance with its' stated rules. IDCC announced the arbitratration on Jul 22, which should have been o/a the date that they received notice from the ICC. According to the ICC's arbitration rules, the respondent (IDCC) has 30 days to reply and file a counterclaim. That would place their response o/a Aug 21. The claimant (Nokia) has 30 days to respond (o/a Sep 20); however, the rules state that "The Secretariat may grant the Claimant an extension of time for filing the Reply."
Apparently an extension was granted, but the question being whether the extension was for a normal time period e.g. 30 days, or whether the extension was granted until a specific happening, i.e. the court hearing. I believe the former would be more appropriate, and that the arbitation panel selection process should be started, with the panel deciding whether any further extensions are necessary.
OT: TFWG. Thanks for your comments regarding IDCC as an investment.
In regard to "BUFF", I assume it is an acronym, but it is one that I am not familiar with. A search of acronyms came up with four that do not apply. I choose "olddog" as it is how I often feel and it is easy for me to remember.
OT. Spree 99. Thanks for your comments. I just spent some time reading posts on two of Raging Bull's IDCC boards. I don't think I will go back there, as most of the posters are of the type that I put on Ignore.
F6---Maybe I should rephrase my question from why I should invest in IDCC to why have others have invested in IDCC? I made an initial investment Friday, strictly on the basis that the price had dropped to the lower levels of its' recent trading range. However, since I prefer to trade on fundamentals for the longer term, I was just wondering what other investors believe.
To me this board is very unique from other boards (different companies) on Yahoo and Silicon Investor that I follow, as it is a very active and informative board, but there is very little comment about IDCC's stock price.
Since there is so much uncertainty about when , and if , IDCC will start getting 3G licenses; and the Nokia and Samsung royalty determinations could take up to a year for resolution, could someone please tell me why I should invest now in IDCC. To me it appears to be a speculation on possible future revenues that may, or may not materialize; or may not be be as high as hoped for.
Crooks is a pretty strong word. I would say the other companies have people who are willing to play hardball to get the best deal for their companies, while IDCC doesn't seem to be pushing too hard.
Yahoo In Play news
11:57AM Samsung raises handset industry outlook to 460 mln units from 435 mln -- Reuters : According to Reuters, co also says demand for its handsets outstrips production supply and that handset inventory levels at lowest in four to five years.
11:09AM Nokia may be recepient of largest phone order in CDMA phone history (NOK) 17.33 +0.02: American Technology Research believes that the largest phone order in CDMA phone history has been issued by Verizon Wireless to Nokia. This phone will be launched on 10/14/03 and with a $50 rebate shared by both Nokia and certain channel partners, will cost users only $50. Firm believes the pure size of this order should help Nokia establish some CDMA market share of note and is a net positive for the company. Nokia sources say the order is large enough to ensure a profit despite the low price required to secure the business. However, firm believes that investors may view this as a negative as the $USD denominated deal may translate into lower EUR ASPs when the deal is reported next quarter.
Jim
It may have already been explained, but since the arbitration time table starts when the request is filed, why would Nokia file for arbitration and then , at the same time, request a court hearing to get information supposedly needed for the arbitration?
The way I read the ICC's rules of arbitration, I would agree with SJRatty that the obligation panel is not "obligated" to wait for the court decisions before proceeding.
In regard to how long the arbitration can take, The following are the time lines from the ICC rules of arbitration. If you add them up it could take at least a year. In addition, as in all such rules, there are provisions for changing the limits. I would suggest that one of the posters who has a good relationship with investor relations, ask a question as to what is the current stage of the arbitration. If provided, this would give some idea of the remaining time limits. Since the request apparently was made in July, the arbitrators should have been selected by now.
RULES OF ARBITRATION OF THE INTERNATIONAL CHAMBER OF COMMERCE
In force as from 1 January 1998, Costs scales effective as of 1 July 2003
Article 4-Request for Arbitration
1. A party wishing to have recourse to arbitration under these Rules shall submit its Request for Arbitration (the "Request") to the Secretariat, which shall notify the Claimant and Respondent of the receipt of the Request and the date of such receipt.
2. The date on which the Request is received by the Secretariat shall, for all purposes, be deemed to be the date of the commencement of the arbitral proceedings.
Article 5-Answer to the Request; Counterclaims
1. Within 30 days from the receipt of the Request from the Secretariat, the Respondent shall file an Answer (the "Answer")
6. The Claimant shall file a Reply to any counterclaim within 30 days from the date of receipt of the counterclaim(s) communicated by the Secretariat. The Secretariat may grant the Claimant an extension of time for filing the Reply.
Article 8-Number of Arbitrators
2. Where the parties have not agreed upon the number of arbitrators, the Court shall appoint a sole arbitrator, save where it appears to the Court that the dispute is such as to warrant the appointment of three arbitrators. In such case, the Claimant shall nominate an arbitrator within a period of 15 days from the receipt of the notification of the decision of the Court, and the Respondent shall nominate an arbitrator within a period of 15 days from the receipt of the notification of the nomination made by the Claimant.
3. Where the parties have agreed that the dispute shall be settled by a sole arbitrator, they may, by agreement, nominate the sole arbitrator for confirmation. If the parties fail to nominate a sole arbitrator within 30 days from the date when the Claimant's Request for Arbitration has been received by the other party, or within such additional time as may be allowed by the Secretariat, the sole arbitrator shall be appointed by the Court.
Article 11-Challenge of Arbitrators
2. For a challenge to be admissible, it must be sent by a party either within 30 days from receipt by that party of the notification of the appointment or confirmation of the arbitrator, or within 30 days from the date when the party making the challenge was informed of the facts and circumstances on which the challenge is based if such date is subsequent to the receipt of such notification.
Article 18-Terms of Reference; Procedural Timetable
2. The Terms of Reference shall be signed by the parties and the Arbitral Tribunal. Within two months of the date on which the file has been transmitted to it, the Arbitral Tribunal shall transmit to the Court the Terms of Reference signed by it and by the parties. The Court may extend this time limit pursuant to a reasoned request from the Arbitral Tribunal or on its own initiative if it decides it is necessary to do so.
Article 24 -Time Limit for the Award
1. The time limit within which the Arbitral Tribunal must render its final Award is six months. Such time limit shall start to run from the date of the last signature by the Arbitral Tribunal or of the parties of the Terms of Reference, or, in the case of application of Article 18(3), the date of the notification to the Arbitral Tribunal by the Secretariat of the approval of the Terms of Reference by the Court.
2. The Court may extend this time limit pursuant to a reasoned request from the Arbitral Tribunal or on its own initiative if it decides it is necessary to do so.
http://www.iccwbo.org/court/english/arbitration/rules.asp
The notations I saw were on separate Forms 4 for both the option exercise and subsequent sale. Apparently the notation is a recommended procedure, but not a specific SEC requirement. The following are taken from a law firm’s detailed advisory on the implementation of trading plans
Section 16
........
Open market trades made under Trading Plans are reportable on Form 4. We recommend adding a footnote to any transaction reported on a Form 4 indicating that the transaction was made pursuant to a Trading Plan, which will inform the public as to why certain transactions were made that otherwise might seem unusual or inappropriate based on the timing of the
transaction.
...........
Exercises of stock options are exempt transactions under Rule 16b-3 and Rule 16b-6(b).However, the sale of the option stock in the open market is not exempt, and therefore the guidance provided above with regard to sales of stock applies here as well. Both the exercise of options and the sale of option stock under a Trading Plan should be reported on a form 4
http://216.239.57.104/search?q=cache:lY0iJIXhhRIJ:www.mintz.com/images/dyn/publications/10b5-1-mem.p...
"As far as selling into any pending news, if he has an established planned sale in place, these shares may already be sold or waiting to be sold even if he is privy to insider information."
I don't know if it is a requirement, but for Form 4's that I have seen for other companies, when shares are acquired through option exercise and a plan is in place, the form usually has wording that:
" Stock options were exercised pursuant to a written 10b5-1 trading plan."
This particular form did not have such a statement, so it is possible he doesn't have a 10b5-1 trading plan that would exempt him from insider trading allegations. From what I have seen, the plan is usually used for periodic, recurring option exercises then almost immediate sales.
South Korean Handset Makers Book Record Third Quarter Sales
SEOUL, Oct 7 Asia Pulse - South Korean mobile phone makers are poised to report their largest-ever sales in the third quarter, which ended on September 30, according to preliminary reports compiled from each manufacturer.
The reports showed Samsung Electronics Co. (KSE:05930), the world's third-largest handset vendor, probably sold more than 15 million mobile phones worldwide for the quarter, up 28 per cent from the same period a year ago.
Led by robust demand both at home and abroad, Samsung, known for its sleek color screen phones, is expected to sell 55 million cell phones for the full year in 2003, outpacing its initial target of 52.5 million units.
Mobile phone sales of LG Electronics Inc. stood at more than 7 million for the third quarter, compared with 4.25 million a year ago.
The world's sixth-largest handset maker sold 5.3 million phones during the second quarter this year.
LG Electronics, the flagship of South Korea's LG Group, aims to boost handset sales by 43 per cent this year to 23 million units, building on the 58 per cent growth it posted last year.
The company has targeted the Chinese and Indian markets with its latest handset designs and brand image.
Other, smaller companies such as Pantech & Curitel Co. and Telson Electronics Co. are expected to post record sales after signing a slew of shipment contracts with American, Asian and European distributors.
The sharp increase was led by growing demand in North American, European and Asian markets and recovery in local consumption, the reports said.
(Yonhap)
wallstrpro
Like you, I have become interested in investing in IDCC as a Special Situation. However, as the company’s business does not fit into what I call a normal mode, I have been having a hard time getting a handle on it.
The posters to the board have been very helpful in going over all the legal and arbitration issues, but as is often the case in these issues , there are differing opinions.
While doing my own due diligence on the background issues I found the following cite that has a lot of background commentary on IDCC. I have just started going thru it, but it seems to have useful information. For example by following the URLs, in the Analysts section you can find copies of the analysts’ reports on IDCC.
http://wirelessledger.com/TabbedPages/FocusStocks.html
Since I am new to the board, I don’t know if this site has previously been commented on.
Q
I know I am not familiar with what has gone on in the past, but wouldn't the information be publicly available someplace if a granted patent has been declared invalid?
<<t seems to me that Nokia, other than the usual delay in paying, is looking to see if any IDCC patents were ruled invalid.>>