This old Forbes article about IDCC still applies today. It even mentions TI and a few other big boys that stopped by to work with IDCC. It is from 2000 and I found it by searching Interdigital and Texas Instruments working on BCDMA. Nothing has changed in almost 9 years.
IDC: a wireless winner
On Dec. 30 shares of digital wireless applications maker InterDigital Communications Corporation idc (amex: idc) reached an all-time high of $82. Since early November, when it was trading at just over $5, the stock had begun a runup that would have given a mountain goat a nosebleed. Even though the stock is trading today at just above $57, the company, which had been founded in 1972, has never seen such prices. What happened?
The short answer is that Wall Street is waking up to the fact that wireless applications, including voice, data and multimedia, are going to be one of the most dominant technology trends in the years to come. (Witness, for instance, the 2619% rise in Qualcomm's qcom (nasdaq: qcom) stock.) It is estimated that by 2002 there will be more than 1 billion wireless subscribers worldwide.
"In September the ITU (International Telecommunications Union) adopted third-generation standards for wireless, and the market started to look around for companies that were positioned to take advantage of that opportunity," says The Yankee Groups Phil Redman. "It saw IDC."
Redman attributes the stocks rapid appreciation to the basic recognition that IDC has hundreds of patents for proprietary CMDA (Code Division Multiple Access) and TDMA (Time Division Multiple Access) wireless technologies. He also cites a joint development project with Nokia nok (nyse: nok), the worlds largest maker of wireless handsets, as well as a licensing agreement with AT&T t (nyse: t).
The company is also working with second- and third-tier OEMs (original equipment makers) as well such as Samsung, Alcatel ala (nyse: ala) and Seimens smawy (nasdaq: smawy). These companies will be crucial to IDCs future growth as larger companies move to developing their own in-house chip capabilities.
"IDC has really good potential for the future," says Redman. "Its not whats hot today. Thats the Internet. But this is a technology company.
Its not consumer friendly and its difficult for most people to understand what theyre doing."
What makes third-generation (3G) technology so compelling is not only that it can bring the Internet to wireless devices, but that it has the potential to do so at broadband speeds. InterDigital is one of only a few companies in the world that have developed broadband wireless technology and successfully embedded it into commercial product.
Currently it is working with Texas Instruments txn (nyse: txn) to complete an advanced ASIC (application-specific integrated circuit) chip set utilizing its Broadband Code Division Multiple Access (BCDMA) technology for use in wireless applications.
For years the company focused on wireless local loop access, a business it has now moved out of. Over the past nine months the company has made an adjustment, according to Howard Goldberg, IDCs interim president and a six-year veteran of the company. He compares IDCs strategy to that of Qualcomm's. If you strip away the infrastructure business, what you have left is a company that has a fundamental technological strength, a patent monopoly and a capability for providing content to companies that want to practice a particular competency.
"When you really are the master of a technology, as we are," says Goldberg, "you can design lots of applications layers. We make the engine and the transmission.
There are many companies looking to enter the market who want the engine and transmission, but want to design their own seats and body."
Goldberg also notes that the company is operating at a profit, has a positive cash flow, almost no debt and, best of all, roughly $80 million to $85 million in cash.
Goldberg sees IDC as a pure play that has a core competency and heavy barriers to entry. "Even hard dollars cant replicate that very easily," he says.
"We saw there would be an evolution of a voice-dominated cellular system and focused the whole company on it. Our visions ahead of the markets and now the market is beginning to understand that."
