Gungrey: Merritt's comments almost 10 years ago are almost the same as what he is saying now.
INTERDIGITAL COMMUNICATIONS - PRES & CEO INTERVIEW
CEOWire
November 10, 2006
Erin Burnett
ERIN BURNETT, CNBC ANCHOR: Now fresh offering at the opening bell at the Nasdaq, we are joined by the CEO of InterDigital Communications. It is a digital telecom company you probably haven`t heard of, but their software is in some of your favorite portable devices from NEC (NIPNY), Sharp, and Sony-Ericsson. And the stock has been big winner this year, up more than 75 percent. CEO Bill Merritt joins us now.
Mr. Merritt, a pleasure to have you with us.
WILLIAM MERRITT, PRES. & CEO, INTERDIGITAL COMMUNICATIONS: It is great to be here.
BURNETT: What is the number one driver of sales for you this year?
MERRITT: Well, I think the thing that is really driving this stock for us this year is obviously good cash performance, cash flow performance, and I think also the fact that people see this not only as a sort of one-time event for the company, this is the type of year they expect us to have come -- going forward.
BURNETT: So what you are saying is you expect all the spending the telecom companies and wireless companies are doing right now to continue at the same pace?
MERRITT: Well, Certainly the -- you know, the mobile telephone device market is doing very well. They are going to go over a billion phones this year. And we are positioned to capture a piece of every phone that is sold over time. So I think it is a great market for us and we are in a great position.
BURNETT: Every phone that is sold?
MERRITT: Because of our patent position, we have the ability to secure revenue on every phone sold today. We get about -- revenue on about 40 percent of the phones that are sold, and we are building that every year. So again, it is a great consumer market and we are in a great spot.
BURNETT: Some of the phone-makers have been out lately though saying that phone sales are not growing as quickly as they thought it might be. Are you seeing that slow down?
MERRITT: Actually I think that the -- you know, the projections this year are to get over a billion for the first time, so I think the market is doing very well. And the mix of phones is good. I think the 3G market, which is important for us, is picking up very well in addition to the overall phone market. So things look pretty good.
BURNETT: But -- so no slowdown in growth rate of cell phone sales?
MERRITT: I don`t see any slowdown this year, and certainly the growth of 3G looks very good, and that is important for us.
BURNETT: All right. Mr. Merritt, thanks so much for joining us.
MERRITT: I appreciate it. Thank you.
BURNETT: Bill Merritt is the CEO of InterDigital Communications.
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