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Mitigating the Pain
How soon can we expect guidance? Are we not expecting a pretty decent increase? By coordinating guidance and the rest of the buyback, Management could go a long way toward mitigating the pain. MHO
From a HS classmate who lives in Uganda
"after satisfying their beer thirst, the first thing people buy now is a cell phone. Even the land lines are working much better although they are gradually disappearing"
Cellphone & Politics - From today's WSJ
One of the few bright spots in the current economic gloom has been the telecommunications industry, where competition is robust, innovation forges ahead and consumer prices continue to fall. Leave it to Congress and Beltway planners to mess with this success.
Yesterday, the Journal reported that the Justice Department has begun an informal investigation "to determine whether large U.S. telecom companies such as AT&T Inc. and Verizon Communications Inc. have abused the market power they've amassed in recent years." And last month the Senate Commerce Committee held a hearing on so-called "exclusivity deals" between wireless carriers and handset makers to bring new devices to market.
What's going on? Well, AT&T is the exclusive U.S. distributor of the Apple iPhone, and other big carriers like Sprint (Palm Pre) and Verizon (BlackBerry Storm) have cut similar distribution deals. Device makers like such arrangements because they can share the financial risks of developing and marketing new products. The partnerships lead to more choices and lower prices.
Nevertheless, some smaller carriers that lack the scale and resources to cut similar deals want Congress to ban them for everyone. To advance their argument, these carriers claim today's wireless markets are increasingly uncompetitive and underserving rural areas. Hu Meena of Cellular South, a Mississippi-based carrier with about 750,000 subscribers, told Congress that "the industry is trending back towards consolidation and the days of Ma Bell." Regional and rural carriers, he said, can't gain access to the latest gadgets because larger carriers have cut these exclusive deals. Mr. Meena is hoping to get some sympathy from Senators who represent rural states, like Mississippi Republican Roger Wicker and Minnesota Democrat Amy Klobuchar.
In fact, the wireless marketplace has never been more competitive. Eight years ago there were 100 million U.S. wireless customers. Today there are more than 270 million. It's true that AT&T (82 million) and Verizon (72 million) have the lion's share. But the next two largest carriers, Sprint and T-Mobile, have a combined 82 million, and the five carriers that round out the top 10 have another 18 million among them. Merely because Cellular South doesn't threaten Verizon's share doesn't mean other companies don't. As for rural areas, 96% of Americans have a choice of at least three carriers.
What these smaller carriers really want Congress to do is prevent bigger rivals from reaping the benefits of scale. But the government's role is to ensure competition, not protect competitors. AT&T, Verizon and other large carriers have invested billions to build the networks that device makers find so attractive.
There's also no denying that these distribution deals have benefited consumers. More than 30 devices have been introduced to compete with the iPhone since its debut in 2007. The fact that one carrier has an exclusive has forced other companies to find partners and innovate. In response, the price of the iPhone has steadily fallen. The earliest iPhones cost more than $500; last month, Apple introduced a $99 model.
If this is a market malfunction, let's have more of them. Isn't Washington busy enough re-ordering the rest of the economy?
Printed in The Wall Street Journal, page A14
LOOP - YOU ARE CORRECT- BM ON ADVERSE RULING
"An adverse ruling at the ITC will leave IDCC with its full arsenal of patents heading to DE with the company far from survival mode as it continues its war with MEN. The share price will suffer for sure, but recurring revenue will continue."
In my conversation with BM after the meeting parapharsed but almost a direct quote:
We have a number in mind that we are looking for. If we don't get it, we are not afraid to take it to a decision or an
adverse ruling. A decision always gives you better clarity. Even though we lost to Motorola, we were still able to execute a successful business plan. And we are a much stronger company now than we were then.
OT-NET-
Doing well thank you- going on 10 years for me since this
past Feb 1, 1999 when Idcc signed with Nok.
Correction-
Should read: I will NOTdirectly answer about ATT and Verizon
Q. Nokia’s N-95 has no provider. Does AT&T and Verizon look at this and ask about licensing?
A. Harry Campagna – I will directly answer about AT&T and Verizon. However, “some carriers” have said to providers – “you license with IDCC or we don’t want to be involved”.
gattica & revlis-
I rechecked my notes and that's what it says. BM did not make any distinction between hardware or software or other arrangement.
Asm report -sorry for the delay -couldn't get logged in!
ASM - King of Prussia – III - Final
General Discussion with Bill Merritt after the Meeting
China – We are well protected by patents in China. The problem has been that Chinese companies are insular and sold only in China. Our strategy is to wait until they go global and apply legal pressure in the United States. We then apply that legal leverage back in China.
Projection Chart – The dollar amount per device is close. An easy exercise to put you close is to take the total revenues for the quarter and divide by the total 3G sales. The revenue curve is flattening a little bit due to the economy. However, the volume and all the new things coming online will impact the chart and it is a question of the interaction between the pricing and the volume that will affect the average price.
International Trade Commission – Bill Merritt feels very good about the trial. He likes the judge very much and stated that he felt we were right and if we got the facts in front of the this good judge, which we did, we would be okay. The Samsung trial helped prepare us for the Nokia trial more than the Nokia lawyers who were sitting in on the Samsung trial. He likened it to IDCC driving the car and Nokia being the passenger. We know how to get there, the advantage is ours. He seemed to think that the ALJ could rule on August 14th or anytime before.
On taking the company private- Don’t believe that is the way to maximize shareholder value. Whatever is out there that comes to us or we seek
that maximizes shareholder value, that’s what we will do.
Finally- agree with Sammdoggs conclusion below:
My overall feeling is one of confidence, a quieter, more solid confidence. As if it’s not a question of success, but only when. This contrasted to the past few years where it seemed euphoric that we made it to the top of the mountain. This year we’ve been on the top of the mountain for a year and it’s old hat, we comfortably belong.
ASM - King of Prussia – II
Questions and Answers from the Audience
Harry Campagna asked “how many stockholders were attending for the first time” Four raised their hands?
Q. Leon asked about the library in Germany referenced in the Nokia case.
A. Harry Campagna replied, This was no surprise, we knew about it. Larry Shay chimed in, that IDCC took the position that this was not available and Nokia took the position that iit was available.
Q. Dividends.
A. Harry Campagna stated that it is always on the table – he mentioned that one time dividends, mergers and acquisitions, or other mattersare always under consideration.
Q. Did Samsung decision help with clarity on rates?
A. Harry Campagna stated, that Samsung did not give IDCC $400,000,000 if they thought they were right. Larry Shay – did give clarity to the Nokia trial and all other discussions we are currently having.
Q. Dewitt Management – Matrix of $1 or $2 per device – will that hold thru 2012?
A. Bill Merritt – we will change the Matrix in the next 1 or 2 presentations because product revenue is no longer included in that chart anymore.
However, we do not expect it to change appreciably.
Q. How does “Kindle” (downloading of books and newspapers) affect IDCC?
A. Bill Merritt – this is a precursor of what is the future. It is all about data not voice and is what the IDCC modem is targeting.
Q. Most of our licenses have to be renewed i.e. Samsung 2012 – how difficult is it?
A. Bill Merritt – it is a disciplined process. Some we start earlier than others. It is always much easier to re-up the license after the initial one as they have already established that they need the technology.
Q. Fiber Optics and Power Source – Is IDCC interested?
A. Bill Merritt – Fiber Optics is both wireless and wireline. We are looking at mergers and acquisitions in both of these spaces. Harry said, we have a special team dedicated to studying both of these areas.
Q. Management Compensation and Shareholder Value – management has doubled and tripled the value of its compensation over the last few years. The stockholders have not participated to this same degree. What do you intend to do for them? Some of us are not getting any younger.
A. Harry Campagna – We have had three buybacks of the company stock to increase shareholder value. As more cash becomes available all options are on the table including dividends or more buybacks or M & A.
Q. Does Nokia have the right to appeal the ITC decision?
A. Larry Shay – after the ITC rules, the President can overrule it. Nokia can appeal to a Federal Appeals Court, but the ban of the their products stays in place during the appeal.
Q. How are we doing in the China market?
A. Bill Merritt – our best way to participate in China is through the modem. It gives us our best advantage.
Q. Dewitt Management – If the original chart holds true, IDCC would have approximately $9.00 per share in 2012? What to do with all that $
A. Bill Merritt – the revenue opportunity is significant. Again, we are looking at all possibilities to increase shareholder value.
Q. Not clear on how our licensees qualify as 10% contributors?
A. Scott McQuilkin – done on a quarterly basis, not yearly.
Q. Verizon has begun building out 4G networks?
A. Bill Merritt – IDCC thru LTE looks at all manufactures of 4G for licensing opportunities. Each new technology gets layered on top of the previous one and we continue to get value from all of them. Statement from Brian Kiernan – standards run 3 to 5 years ahead of the market. What Verizon is doing today we already participated in from day one thru the standards.
Q. Why didn’t you get out of the slim chip sooner since you were not making any money and increasing expenses?
A. Harry Campagna and Bill Merritt – it was not a zero sum game – there was anciliary value. We now have access to customers that we never would have had plus their road maps and direction which we are able to monetize.
Q. Nokia’s N-95 has no provider. Does AT&T and Verizon look at this and ask about licensing?
A. Harry Campagna – I will directly answer about AT&T and Verizon. However, “some carriers” have said to providers – “you license with IDCC or we don’t want to be involved”.
More
ASM - King of Prussia – I
Following is a paraphrased summary of what I remember from the ASM- typed by my very patient wife while I dictated.
Parts are a repeat of what Sammdogg has already posted. Apologize for any typos etc.
Room Capacity 108 – 2/3 filled –many emty chairs
Board Members Present : Steven Clontz, Edward Kamins, and Robert Roath
Management Present: Scott McQuilkin, Mark Lemmo, Larry Shay, and Bill Merritt, Janet Pointe
Legal Two
Auditor- Three
2008
After a welcome by Harry Campagna, he introduced Bill Merritt who gave a report card for the year 2008.
He reviewed most of what we already know on Samsung, 2G and 3G, over 400,000,000, over 18 months, with 50% of the market licensed.
Additional licensees, initial design win for the chip, cooperative arrangements with Texas Instruments, certification/validation of dual mode product, continuing revenues from chip design from Infineon, NXP, Spreadtrum.
608 US Patents applied for, 136 granted.
Continue working on cellular, 3G-LTE.
IEEE -media independent handover-advanced 802.11.
Future tech initiatives: security, networks, seamless conductivity,
3 .8 million shares bought back.
2009
Drive 3G License Program
Leverage across anything wireless
Leapfrog wireless solutions – higher value for IPR
Mergers and Acquisitions
Push Financial Results
Technical Vision -
People to People – range of celluar was expanded by relay, femto cells and reach was extended by WiFi and Wi-Max which all create issues. There is no systematic way to move from system to system as we move from people to people, to people to things, to things to things.
What is required are dependable connections to everyone, everything, everywhere! In order to do this, we are emphasizing:
Ultra Broadband – low latency – high capacity
QUOS Flexibility – big thruput, low power, low cost, small size
Security and Privacy
Seamless – make it work together
We summarize this by calling it a “network of networks”.
Bill Merritt next showed a slide presenting a new chart they will be using starting at the USB presentation next week- a vertical axis labeled the “Market” and the horizontal labeled as “Time”. Along the horizontal axis, he had two arrows proceeding slightly upward and widening as they moved to the right. The bottom arrow labeled cellular and the second arrow on top of it was labeled advanced air interface. Underneath the horizontal time line, it was labeled people to people on the far left, people to things in the center, and then things to things on the far right. Then, sucessive arrows with slight inclines above the first two- the third arrow being advanced communication systems, the fourth arrow being future device architecture and the fifth arrow being security. The message being that the arrows get fatter as they proceed upward and to the right, penetrating the market as we move from people to people all the way over to things to things, hence increasing revenues.
old post-poison pill-my conversation with HC at ASM 2 yrs ago
paraphrased
Poison Pill - the poison pill was established sometime in 1999 in the 250 dollar range as a result of quite a few things happening back at that time. It is under review right now and the board will take a look at it in light of our current strengths and our future potential in the market. I asked the same question that I asked of him last year - whether it would be easy for a potential suitor to get around it. He again stated that I can show the research that I have on my desk and it will not be a picnic for anybody to try and do so and very likely not to succeed.
On a Buyout - we would certainly evaluate a buyout if it was one for fair value. After all, I am the fifth largest stockholder in this company counting all institutions, mutual funds etc. It would be to my great advantage to entertain such a buyout but, I repeat, no one will ever succeed in a buyout if it is not one of fair value for all shareholders. Ain't gonna happen!!
I was interested in finding out more about the man who took his dry cleaning dispute to the Supreme Court of the United States. This is what he told me. He had a patent on a unique color that was providing a very nice living to him for 30 years. This color was good for years and would not fade. One or more thieves (a la Nokia) came in with knockoffs that were of inferior quality that lasted 6 months and undercut him in price. He said, it wasn't right and I was not going to accept anything but full restitution. And, as you know, he went to the Supreme Court and won his suit.
It was no different when ERICY took advantage of IDCC over a decade ago. Our board did not want to fight saying that we were too small to take them on. Those people had our shareholders money and it belongs to us! We are not running a charitable institution here. HC also said, it is the right thing to do
(at last years ASM you may recall that HC told me that ERICY hated his guts for his aggressive posture). He said that we would not be standing here today if we did not take that course of action!
Revlis-
I think that was it
CONVERGENCE
I remember having a conversation with Kiernan at an
Annual Sharholder's Meeting several years ago where
he stated(paraphrased)"Convergence is the sweet spot and that's where we aim to be".
FWIW - Last night I had a dream that IDCC was at $71(odd number?) - so vivid that I was high fiving with one of my five kids all of whom own shares.
Couldn't make out any reason for the move- just gasped as I looked at the computer screen. I relate this because twice in my life I have
had such vivid dreams come true. If I told you about this dream after the fact, y'all would say I was blowin' smoke!! Could be my same sources or
Mschere channeling to me................hope springs eternal!
idcc options
Interdigital Inc. (IDCC) – Wireless handset maker, Interdigital recently sought to secure license revenues from sales made by Samsung, which it alleged employed its proprietary technology. Over the past couple of days and in light of the ruling in its favor, we’ve noted bullish option activity surrounding the stock, which is flat today at $25.75. We continue to observe long call positions build in the December contract at the 30 and 40 strikes where investors have paid premiums of 1.35 and 15 cents respectively hoping to see shares ramp higher as earnings reflect greater core revenues. At the December 40 strike price, investors have bought enough calls to double the existing bull positions on the stock. As the shroud of uncertainty lifts surrounding the stock, options implied volatility has been marked lower by around one quarter today at 94%.
Fed. Cir. Upholds Big Broadcom-Qualcomm Ruling
Posted by Ashby Jones
Often, it’s hard for us non-technology-inclined folks to determine which patent rulings coming out of the Federal Circuit are potentially groundbreaking, and which aren’t. But patent folks seem to be buzzing over a Federal Circuit ruling issued yesterday involving a maneuver by Qualcomm against Broadcom that in other cases has been called a “patent ambush.” So we’re gonna take the liberty of getting you up to speed on it.
According to a helpful piece by the Recorder’s Zusha Elinson, the Federal Circuit — the federal appellate court which hears appeals on many of the nation’s patent disputes — agreed with a lower court’s ruling that Qualcomm should be punished for its behavior in a dispute with Broadcom. The lower court, in a 2007 opinion by Southern District of California judge Rudi Brewster, slapped Qualcomm for not disclosing patents to a standards-setting body and then suing adopter’s of that standard, namely Broadcom. Click here, here and here for earlier LB posts on the case, which largely focused on a nasty discovery dispute between the parties.
The Federal Circuit limited Qualcomm’s ability to enforce the two video compression patents it hid from a standards-setting group called the “Joint Video Team.” It also must pay Broadcom’s attorneys fees, which total more than $8.5 million.
According to the Recorder, the opinion helps clarify what is legal behavior in the murky area of standards-setting organizations. Such organizations are widely used in the technology industry to ensure, for instance, that all lamp plugs can fit into the same electrical outlet.
The broader impact? Clarification in what’s long been a rather foggy area of the law. “The courts are showing a willingness to find a duty to disclose where there’s none set forth,” said Tyler Baker, a partner at Fenwick & West, to the Recorder. “It says that you should err on the side of assuming that you have to disclose, or you may suffer the consequences of having your patent made unenforceable if you don’t.”
Broadcom was represented by WilmerHale’s Bill Lee. San Diego’s Qualcomm, which tapped Sidley Austin’s Carter Phillips to handle the argument, emphasized the ruling’s silver lining — that Federal Circuit pared back Brewster’s order that the patents shouldn’t be enforceable at all.
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Read more: Intellectual Property
Comments
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the American court system always finds for the smaller company (ie underdog) at the expense of the larger company- because judges know exactly zip about technology and they fall back on the underdog rule- find for the little guy
Comment by w steffan - December 2, 2008 at 9:33 am
thanks
Carpenter's Report-
Can someone point me to a copy of Carpenter's report?
The Mrs. and I just returned from two weeks in the Holy
Land(Jorden/Israel). While in Jordan, saw a guy coming down the road on his camel with a cell phone stuck in his ear!! In another small backwoods town, saw some old guys in suits with their a Arab headdresses sitting on chairs on sidewalk gabbing
on their cell phones. Not sure whether they were 3G phones or not.
REVLIS/OTHERS
Is this the proper address and phone no of the ITC?
My brother-in-law who is a retired DC Attorny will try
to attend some of the remaining sessions and report back.
Like many of you I got him into IDCC and yesterday he
put his stop loss in at 17.99 and got lucky.
500 E STREET S.W.
WASHINGTON, DC 20436
PHONE: 202-205-2000
My3-
Thanks- I feel better already after reading yours
& other's comments about the meeting.
Annual Shareholders Meeting
Regret that I will not be able to make my usual information
report. I am reporting from a hospital bed on my laptop after
being admitted at 12:30 last night for an emergency appendectomy. All went well. What a bummer!!!
Somebody bring me some good news to make me fell better!!
NEW LICENSE!!!
Pa.Senators Spector & Casy were sent emails today
ELLIS
Read tc's quote on Atomic Bob's
Nokia Calls In the Bully
By Dave Mock August 20, 2007
In a growing trend, No. 1 cell phone supplier Nokia (NYSE: NOK) recently appealed to the U.S. International Trade Commission (ITC) to ban the import of Qualcomm (Nasdaq: QCOM) chips that supposedly infringe on five of its patents. If you're thinking you've heard this story before, you have. In June, the ITC banned certain Qualcomm chips that it ruled infringe on one of Broadcom's (NYSE: BRCM) patents.
The latest salvo in a long legal battle between Nokia and Qualcomm, the ITC request comes mere days after a similar request from InterDigital (Nasdaq: IDCC) against Nokia itself. In that complaint, InterDigital wants the ITC panel to ban the importation of the new N75 handset and any other next-generation Nokia product that supposedly infringes upon two of its patents.
Following the precedent set by Broadcom, the ITC bully has now become everyone's best friend on the telecom playground. While lawsuits sit pending in courtrooms around the world, the ITC motions can more effectively force the hand of one party in a dispute by constraining imports and threatening product rollouts from customers such as Sprint Nextel (NYSE: S), AT&T (NYSE: T), and Verizon Wireless, a joint venture between Verizon Communications (NYSE: VZ) and Vodafone.
Nokia is clearly taking advantage of the ITC's recent strong stance, moving to attack Qualcomm while it's down. Since Qualcomm has logged its own ITC complaint against Nokia (set for a hearing in September), it will be interesting to see how deeply the body becomes embroiled in intellectual-property disputes.
This new trend is somewhat silly, because all of these companies hold thousands of patents, vastly increasing the odds that each violates at least a few claims on a patented technology owned by the others. But the ITC's willingness to actively involve itself in debating infringement of even single-patent claims has touched off a race to see who can conclude an investigation and ban offending products first. The fastest legal team gets a leg up in license negotiations, while the other party gets handicapped with a product ban from the ITC.
While those bans are within the scope of the ITC's authority, enacting one based only upon a small piece of a much larger picture sets a dangerous precedent -- one that's skewing leverage in free-market license negotiations and eliciting a growing wave of new IP litigation tactics.
For further Foolish insight:
This is the Year for These Stocks
Just Say "No" to Qualcomm
Dial "0" For Lawsuit
InterDigital Communications is a Motley Fool Stock Advisor selection. Find out what other stocks the market-beating service is recommending courtesy of a 30-day free trial.
Fool contributor Dave Mock should not have been banned from the goofy golf course -- he found the clown face in that condition when he got there. He owns shares of Qualcomm and is the author of The Qualcomm Equation. InterDigital is a Stock Advisor recommendation. Vodafone is an Inside Value selection. The Motley Fool's disclosure policy would never make anyone eat dirt.
thanks
New York Court---
For what It's worth,I talked to my brother-in-law(who I enticed to invest in IDCC) who is an attny and asked him about the NY Court situation. He thought that the court had a higher proportion of criminal cases to civil cases and that more of the criminal cases were being pushed to the top of the pile in order to meet the constitutional requirement for a speedy trial.
Maybe Loop and others already commented on this and I missed it--
OT- SAIL-
Email me at ecapetola@chesco.org and I will send you some interesting reading on the subject.
Cappy
Google cell phone & WSJ
The following quote is in the article.
"It's not clear which manufacturers might build
Google wireless devices, though people familiar with
the project say LG Electronics Co. of South Korea
is one company that has held talks with Google."
KOP III
QUESTION AND ANSWER SESSION
Q – Did IDCC receive any buyout offers this year?
A - H.C. - I can’t tell you specifically but I can tell you that if or when we do they will always be brought to the board for consideration.
Q – Can we learn more about the engineers who are the heart and soul of this company?
A – H.C. - we will try and see what we can do.
Q – What can you tell us about TDSCDMA?
A- B.M. – it is difficult but promising. We are emphasizing both product and licensing. We spend a lot of time in China. We emphasize technology first to the Chinese before talking licensing. That is the best way to penetrate that market.
Q - Will the presentation you made today be on the website?
A – B.M. – it will eventually and we will try to get all presentations up on the website on some type of regular basis.
Q – What are we doing to get more coverage for IDCC?
A- J.P. – we are systematically meeting with sell side analysts in the telecom area and also talk at conferences of other analysts that don’t cover our market segment.
Q – What will be the effect of the Qualcomm – Broadcom lawsuit on IDCC?
A – B.M. – since there is no decision, it is difficult to project.
Q – Suggestion on your data chart – it appears that the income derived on your chart is for phones only. Are ASIC modems and PC cards also included? This needs clarification.
A – B.M. – will do.
Q – China again. Can you expand on your efforts there?
A – B.M. – we are leading with technology, such as the dual mode modem. It is the best way to lead into that market and then come in with patent licensing. We are actively engaged and they are showing strong interest.
That was the end of the meeting. Then, Bill Merritt thanked Rich Fagan and wished him well in his future endeavors.
H.C. adjourned the meeting.
CONVERSATIONS WITH H.C. AFTER THE MEETING
ASIC – we have never had leverage in the past to get our work done as we do now with the ASIC. Customers want and need it. It opens doors for us that were difficult to get through before. We are optimistic about what lies ahead.
Licensing the top six – we could get it done tomorrow but not at a price that anyone would be happy with- most of all our shareholders. We have a solid business plan and we know the value of what we are offering and we expect to be reasonably and fairly compensated.
Rumors – there are always people out there who have an agenda to accomplish their purposes. One read many times that we would not be paid a dime from many of our licensees yet, the record bears out that we have.
Stock Price – the market is going to do what it is going to do. There are hedge funds, manipulators etc. doing what they can to advance their purposes. We have always focused on our business plan and continue to execute. Our confidence in our business plan and strategy is manifested by the efforts you have seen in the stock buy back area.
CONVERSATIONS WITH BILL MERRITT AFTER THE MEETING
Nokia – Nokia use to do all their own stuff but now that technology is changing so rapidly, they can’t respond in time to keep up. This provides opportunities for IDCC and others to fill in those areas.
KOP - II
BILL MERRITT PRESENTATION – To be used at Bear Stearns next week
Our business strategy will be to predict where the wireless sector is going and then work backwards. There are four pieces to this strategy. We have over 3,000 patents which rank us in the top 100 companies in the US and rank 94th worldwide. The second piece is the standards and we have contributions in 2G, 3G, and 4G. The third piece is licensing and we have brought in 1 billion is licensing revenues. Only 2 companies rank better than us - IBM and ? We have over 30 plus years experience in the cell phone area and we are making great progress in Wireless Lan.
He next showed the graph that we are all familiar with that 1.2 billion phones will ship by 2010 of which 60% will be 3G. Analysts have questioned what we were going to do with all of the drop-offs in expired licensing revenues. Despite that, recurring revenues over the last 18 months have increased 31% and net increased 33%. We have a solid balance sheet, which gives us the ability to invest in the ASIC, repurchase shares of stock, and have a cushion that helps with negotiations and litigation.
Why don’t we declare a dividend? When we review the options for our cash, dividends are always on the list. As we go through the analysis, we always ask ourselves – what is the best return for our stockholders? Since the stock is below its true value, the answer, up to this point, has always been to repurchase shares.
We have some solid offerings.
NXP – Phillips – 3G HDSPA ASIC
General Dynamics – WCDMA modem
IDCC – 2G/3G dual ASIC
Infineon – WCDMA and HDSPA – for terminal units- receiving some revenue now and should ramp higher in 2007 and beyond.
Another chart showing three sources of revenue – basic phones are decreasing, smart phones, data centric, and PC cards are increasing. We use our modems to take advantage of the data centric growth, licensing to take advantage of the basic phones and the smart phones. We are very encouraged by the market and where we fit in. Our ASIC provides better performance than Qualcomm’s. We license some of our IP to chip makers (Infineon) in exchange for getting preferential pricing in manufacturing our ASIC.
CONVERGENCE
People want to move from one network to another without user intervention. IDCC two years ago started 802.21 standard to address this issue. We are using SK Telecom to productise this. We get three revenue sources from this: 1) software to SK and and evangelize to others like LG. 2) differentiate our product offerings from others. 3) licensing others.
Today 30 to 40% of phones sold is for the 3G mobile device market. In this group we are averaging $2.00 per phone. 100% of phones in the market need some type of licensing from IDCC to operate. Our 3G ASIC provides exceptional leverage to get 3G licensing done. Customers want and need our ASIC! We expect sampling by the end of the summer with commercial rollout by the end of the year.
KOP - I
June 7, 2007
This is my best recollection of what took place at today’s ASM. All comments are paraphrased. This is the fastest that my comments have ever been typed because I dictated and my wife typed. I know we all want IDCC to have the kind of value that I place on her typing skills She is not for hire
The meeting was called to order at 11:00 by H.C. The room held 180 seats – there were only 60 to 75 shareholders which did not include the thirteen board and administrative officers.
H.C. thanked the board for their support. He said that he is proud that he crafted this board with such diversity of talent. He then introduced the board members:
PRESENT ABSENT
D. Ridgely Bolgiano Steven T. Clontz
Robert S. Roath Alan P. Zabarsky
Edward B. Kamins
H.C. then introduced management: William J. Merritt, Janet Pointe (ovation), Rich Fagan, Isaac’s Kiernan, Mark Lemmo, Jim Nolan and Miller, Bruce G. Bernstein(absent). H.C. said that he was sorry to see Rich Fagan go and he proved to be of great value to IDCC. H.C. said, we have a ton of candidates for his position.We are a different company now then we were ten years ago. People want to come to work for us now.
BUSINESS MEETING –
41,000,710 shares or 88% of the voting stock was totaled. Roath, Shaner and the auditor all passed.
H.C. Comment – We are a totally different company than we were 13 years ago. We are the strongest we have ever been. The reasons for that are the quality of our engineers, management and board of directors. He then introduced Bill Merritt.
Today's WSJ - ITC - Broadcom & Qualcomm
Chips, Ahoy
June 4, 2007
A normally obscure federal agency may soon ban the import of an entire class of next-generation mobile phones. Verizon -- which is not a party to the dispute but would be its chief victim if the ban is enforced -- has estimated the losses to be in the billions of dollars.
The case is one front in a blood feud between Qualcomm and Broadcom, two U.S. semiconductor firms that both outsource nearly all manufacturing to chip foundries in Asia. The two have been clawing like ultimate fighters over patents that each says the other is violating. Last week, Broadcom won a round in a U.S. federal court when a jury ruled that Qualcomm has been infringing several Broadcom patents. But as in most patent cases slogging through federal courts, this litigation is far from over.
Enter the International Trade Commission. The independent federal agency (budget: $64 million) has the power, dating back to the Smoot-Hawley tariff, to bar the import of products that it deems to infringe the patent of an American patent-holder.
The nice thing about the ITC -- if you want to terrorize a competitor -- is that it works fast, doesn't wait for a finding of infringement from a federal court, and can issue a permanent import ban. For some products, an import ban is equivalent to removing them from the market, because nobody makes them in the U.S. This is the case with the Qualcomm chips that Broadcom wants barred. After we wrote about this case last year, the administrative law judge overseeing the case ruled against a ban, citing the widespread economic disruption it would cause to non-parties like Verizon.
That seems to have put the ITC's staff in a snit. ITC Chairman David Pearson likes to say that the increasing number of patent cases coming before the agency shows that its process "adds value." When he went before Congress this year seeking more money for his agency, he cited the Broadcom-Qualcomm case, as well as pointing out how fast the ITC caseload has grown.
A bureaucracy doesn't make a name for itself by not taking action. The parties for which Mr. Pearson takes pride in "adding value" might not see the ITC's services as so valuable if it refused to ban imports in a high-profile case. Thus a refusal to ban Qualcomm's chips might dent the rising caseload Mr. Pearson is touting on Capitol Hill as a reason to pump up his budget.
The ITC's six commissioners recently postponed a decision in the Broadcom case until this Thursday. They can accept the administrative law judge's finding that a ban on Qualcomm's cell-phone chips would cause undue economic disruption, or they can overrule the judge and issue the ban anyway.
If the ITC bans Qualcomm's chips, President Bush has 60 days to overrule the Commission, a decision he has delegated to U.S. Trade Representative Susan Schwab. If the ITC determines that its bureaucratic ambitions outweigh the public interest here, it will fall to Ms. Schwab to impose some adult supervision. The business world is paying close attention to the precedent that a ban could set, even as the ITC staff covets vast new leverage over American industry. Let's hope the Bush Administration is watching with equal care.
OT- AAAAmen!!- my upbringing was a mirror of yours!eom
RIP TILDEN- ACAC-
My wife and I have been members of ACAC for the past 2 & 1/2
years- was there for a couple of hours yesterday- no sign of Rip. I let you know if his waist line is substantially reduced from his appearances at rh ASMS!!!
China, U.S. Agree to Nasdaq, NYSE Offices in
China
MARKET ALERT
from The Wall Street Journal.
Dec. 15, 2006
China and the U.S. agreed to allow the Nasdaq and NYSE to open formal
business offices in China, the Chinese finance minister announced at the
end of high-level talks with U.S. officials.
http://online.wsj.com/article/SB116615867959051050.html?mod=djemalert
OT- CLARENCE
Is there a symbol for Global Photonic Energy?
Annual appeal for Wirelessledger.com/Bill Dalglish
As some of you know, Bill Dalglish and his son Lee are responsible for starting and maintaining Wirelessledger.com.which primarily features information on IDCC. The effectiveness of educating the stock buying public was pointed up recently when the Korean Times quoted his site as a source of several of its recent articls on 3G. And you all have seen his efforts to summarize the most important posts to save all of us time.
It costs Bill about $250 a month out of his own pocket to maintain his website- Wirelessledger.com. . Last time I checked with JIM, there were about 1000 members on this board. If everybody gave 5 bucks that would be $5000- enough for two years (hey, if your feeling generous, by all means send more!). I'm not sure how many are on Atomic Bob's or Yahoo but I will also post this message there too.
To the extent Bill's website educates new investors creating additional demand for shares, we all benefit. His unselfish efforts are greatly appreciated. No one can force you. Sometimes it's nice to do the right thing!
Send your contributions to:
Bill Dalglish
1911 Hampton Dr.
Lebanon, TN 37087-4225
Jim- I stand corrected- thanks eom