InterDigital Inc (IDCC)

[jai]

Arbitration is for 2G, not 3G

Initially when the Nokia arbitration happened I thought that this was about 3G rates. Now I feel that this is just about money pure and simple.

Recently I've been attempting to project the potential in terms of dollar amounts if everyone signs 2005 and 2006. I do not have the expert knowledge of Ronnie so I asked him for some help. I've outline 26 major events that need to occur for IDCC to achieve its proper revenue stream. Using the UTMS handset model projections posted on this board I came up with this formula.

WCDMA handsets at 1%.

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.

Nokia is selling mostly 2G handsets. They will pay more to IDCC form 2G than anyone else. IMO, the reason they are fighting tooth and nail is to save money. They know Motorola will not pay for 2G and they think they should not either.

If anyone can please help me in this model, I'd appreaciate it. I do not know how accurate these projections are or if the simplicity applies here.