InterDigital Inc (IDCC)

[jai]

Yes it is. I'd really like to see what revenue would look like assuming everyone is signed and paying.


I'm still trying to come up with a revenue model. I'd like to take the entire pie and cut it up based on current licensing terms. I'm using the WCDMA handset report posted here several weeks ago for numbers.

Lets assume that we get 100% royalties on 2005 and 2006 WCDMA handsets at 1%.

WCDMA handset forcast to get some rough 2005 and 2006 numbers.

2005

$310 unit price times 1% = $3.10 per unit times 48 million units = $148 million in WCDMA handset revenue

2006

$250 unit price times 1% = $2.50 per unit times 90 million units = $225 million in WCDMA handset revenue.

The report has projections of 766 million units in 2005. Not sure if these are all 2G.

At .4% it would equate to $135 unit price times .4% = .54 cents per unit times 766 units = $413 million dollars.

In 2006 we have $135 unit price * .4% = .54 cents * 843 units = $455 million dollars.

So 2005 reveue using this model is $150 million + $413 million = $563 million.

2006 revenue is $225 million + $455 million = $680 million.

Comments anyone?

In view of the advanced capabilities of WCDMA devices, notably video, internet browsing, interactive file transfers and location services – imposing far greater requirements on component technology, including camera and screen resolution, applications processors, internal and external memories, power amplifiers etc, their average price levels are poised to tower head and shoulder above that of the typical 2G handsets. On this basis, we factor in an average selling price of WCDMA gadgets of US$360-370 in the current year (down from US$450 in 2003), falling to US$310 in 2005 and by a further US$60 to US$250 in 2007. By comparison, the ASP of 2G handsets is estimated at US$138 and US$133 in 2005 and 2007 respectively. Accordingly, although diminishing the price premium attributable to 3G is expected to hover around 125% in 2005 and 90% in 2007. The revenue potential inherent in the 3G opportunity is thus disproportionately more favourable than what its shipment projections at first sight would suggest.

Breakdown of handset market by 2G and 3G (WCDMA) device categories
Parameter 2003 2004E 2005E 2006E 2007E 2008E
2G units (m) 557 672 766 843 910 960
3G units (m) 4 20 48 90 153 230
Total units (m) 561 692 814 933 1063 1190
2G growth (YoY) 116% 21% 14% 10% 8% 5%
3G growth (YoY) 800% 400% 140% 88% 70% 50%
Total growth (YoY) 17% 23% 18% 15% 14% 12%