InterDigital Inc (IDCC)

[olddog967]

I am confused why IDCC signed a license renewal with module maker u-bloc, but apparently did not attempt to sign renewal agreements with major module companies Sierra Wireless and Gemalto.

u-blox’s PLA apparently primarily relates to their wireless module products. As stated in today’s announcement

“We are pleased that u-blox is continuing its relationship with us, and delighted that our contributions to core wireless technology continue to deliver exciting solutions to the rapidly-growing IoT market,” said Lawrence F. Shay, President of InterDigital’s patent holding subsidiaries.  “u-blox’s desire to extend its agreement highlights the strength of InterDigital’s research contributions and intellectual property, and positions u-blox to continue in the wireless module market.”

in 2012 IDCC signed licenses with wireless module makers Sierra Wireless, Cinterion (Gemalto),, u-blox , and Enfora (Novatel).

Based on revenues, Sierra Wireless and Gemalto are the market leaders covering approximately 50% of the cellular wireless module market; u-bloc's share was only about 5%.
https://www.counterpointresearch.com/sierra-wireless-and-gemalto-lead-the-iot-cellular-module-market-in-terms-of-revenue/

When IDCC issued their updated revenue guidance for 4th qtr 2016 the announcement stated:

“After the expiration later this month of certain module license agreements that overlap with the target markets of the Avanci IoT licensing platform, we see our annual royalty platform as being in the range of $360 million to $380 million,” said Richard J. Brezski, CFO of InterDigital.”

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=127266315&txt2find=

The statement indicated that the Sierra Wireless and Gemalto licenses, which expired in Dec 2016, would not be renewed based on the apparent belief that they would license with Avanci. To date there have not been any announcements about Avanci signing any licenses.


There is an interesting Risk Factor statement in the 10-K:

“Our strategy to diversify our patent-based revenue by pursuing alternative patent licensing arrangements and patent sales may not be successful. There is no guarantee that we will succeed in our pursuit of select patent licensing arrangements or patent sales, and, if we are successful, there is no guarantee that the revenue and cash flow generated through such alternative licensing arrangements (such as the Signal Trust and the Avanci licensing platform) or patent sales will be greater than the revenue and cash flow we would have generated if we had retained and/or licensed the patents ourselves.”