InterDigital Inc (IDCC)

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The IDCC mantra has been all about 3G, how 3G is IDCC's expertise. Now we hear management say this:

"Management indicated their expected rate for 3G was somewhat below the 1%-3% they wanted for 2G. "

If IDCC IS 3G, then why would they get a substantially lower rate than what they expected for 2G? O.K. so management only expects to get less than 1% royalties for 3G? And they have precious few 3G licenses signed up (remember the indemnifier). Recent Nokia action will not help accelerate licensing either.

Plus, a royalty on most devices is far from given. My guess is they will be shut out of much of the 3G market and have to settle on small royalties from a manufacturer or two who use IDCC's protocol stack or some other minor contribution. But protocol stacks have a relatively short life, IDCC will need to aggressively market their wares to maintain break-even profitability.

I'm sorry if I paint a bleak scenario but I'm not going to conform to the norm around here and paint a rosy picture when so many important clues point in the other direction.

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