My previous post stands IMO UNLESS Samsung contracts out a large portion of their manufacturing where we will also be paid from the contract manufacturers when they are licensed. If that is the case then IDCC will be receiving the money from Sammy plus the money from contract manufacturers. Anyone know what portion of Sammy's production is farmed out? Do they do most of their own manufacturing or do they use contract manufacturers also where we will be paid from them too?
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IF the total contract amount thru 2012 is only $400 million to settle all past sales plus all future sales of 3g products thru 2012, this deal is terrible IMO. How can you talk to reps from NEC who has been paying us something like $30-40 million per year for what about 7 years now and continuing to pay, it will mean that NEC will pay us about the same in total thru 2012 as Sammy. For those who talk about time value of money, we have been receiving this from NEC for years so the value of their payments is higher if you want to look at time value of money.
NEC has something like less than a 2% market share while Sammy has 18% and in total thru 2012 they will both pay about the same dollar amount? SOMETHING DOESN'T MAKE SENSE As usual the press release is ambiguous but according to an IHUB member we will only get $400 million from the second largest manufacturer. How can this be the case?
Even if you forgive all past 2g phone sales and even if the total payment of $400 million is for sales from now till the end of 2012, Sammy's estimated sales of 3g products is estimated to be over 500 million units from 2009 forward which is less than a buck a phone. From a previous post of mine:
I found what is probably a very reasonable estimate of sales from Tom Carpentar's report for sales 2008 - 2012. This does not include sales for 2006 and 2007 but gives me a good idea of what to look for. Here are Tom's estimates for 3g phones by Samsung:
2008.....68 million
2009.....87 million
2010....113 million
2011....148 million
2012....184 million
Total.. 600 million for 2008 - 2012.
I know that IDCC did not forgive all past sales and that some of the agreement covers 2g products for which they already received 2 arbitration wins plus 1 court verdict confirming the award plus $164 million bond put up for 2g. How can this be all that IDCC is receiving? It can't be so, at least I hope so.
If that is all there is to this deal it will never achieve the greatness we all believed in this market or any other market IMO. The ITC case must have gone much worse than we ever imagined IMO otherwise they wouldn't have settled for this little.
AI
