InterDigital Inc (IDCC)

[rmarchma]

Rox re US revenues of $18.9m

Last year's US revenues were $9.4m, of which $8.4m was from Apple. I'm now almost certain that Apple's license was amended in the second quarter of 2010, which raised its fixed-fee from $2.1m per quarter to $3.6m per full quarter. My attempt at reconciling to the $18.9m US revenues for 2010 as follows:

Apple = $11.9m (Q1:$2.1m, Q2:$2.6m, Q3:$3.6m, Q4:$3.6m)

Beceem/Broadcom termination fee = $4.3m

Lucent = $2.8m ($700,000 per quarter x 4)

Total US = $19m


Although, Lucent is now owned by French company Alcatel, I think that IDCC still classifies Lucent as US revenues, or IDCC is splitting Lucent between US and "Other Europe". "Other Europe" has to include Phillips/ST Eric, as IDCC is receiving chip revenues from them. Since the total of "Other Europe" is only $1.8m, then all of Lucent's revenues of $2.8m can't be classified in "Other Europe", perhaps some or none. (BTW I agree with you that Kyocera's revenue is being classified as Japan, not US).

The following PR previously furnished by Olddog, substantiates the Beceem termination fee:

"KING OF PRUSSIA, Pa.--(BUSINESS WIRE)-- InterDigital, Inc. (NASDAQ: IDCC) today announced financial guidance for fourth quarter 2010. InterDigital® expects fourth quarter 2010 revenue to be in the range of approximately $92 million to $94 million. This range includes approximately $4.3 million in technology solutions revenue associated with a modem core customer whose agreement is expected to terminate as a result of the pending acquisition of that customer by a third party."


The following reposts, provide additional info as to why I'm now virtually sure that Apple increased its fixed fee.

rmarchma Share Saturday, October 30, 2010 8:02:45 AM
Re: rmarchma post# 297980 Post # of 308735

Could increase in fixed-fee revenues be Apple

From the latest 10Q as follows:

...."The increase in fixed fee amortized royalty revenue was driven by a full quarter of revenue from our September 2009 patent license agreement with Pantech, compared to a partial quarter of revenue in third quarter 2009, and our second quarter 2010 amendment to our patent license agreement with an existing customer."

Excerpt from my referenced post as follows:

...."(5) Quarterly fixed-fee revenues of $49.6m have increased from previous quarters. Fixed-fees were $48.1m in the last quarter of 2009 and the first quarter of 2010, and $48.6m last quarter. Evidently there is a new fixed-fee licensee that has not yet been disclosed by IDCC, or an existing licensee's fixed-fees got increased, which would be unusual and unique."

This is the first time to my knowlege that an existing IDCC fixed-fee contract got amended and the fixed royalty fee increased. This explains the unidentified $.5m increase in the second quarter 2010 for a partial quarter, and a total $1.5m increase for a full third quarter ($49.6m total current fixed fee - $48.1m base fixed fee first quarter 2010).

Now as to the possible identity of this existing fixed-fee licensee who amended and got increased by $1.5m per quarter, I think it's a good chance this could be Apple. I doubt it is Samsung, who is a fairly recent licensee. I doubt it is LG whose license comes up for renewal on Jan. 1. LG had a threshold provision, but that was in the existing contract, ie the license would not need to be "amended". I don't think it is Pantech, whose license already includes LTE. (BTW one possible way an existing fixed fee license might be amended is to include an additional standard, such as LTE, that is not part of the original fixed-fee license).

I seriously doubt that the amended fixed-fee license is with Lucent, whose license expires at the end of this quarter. If it were Lucent, it would be a license "renewal" rather than a license "amendment". It can't be Kyocera, who renewed its license as a per-unit license rather than a fixed-fee license. That only leaves two more possibilities: Apple and the previously unidentified fixed-fee licensee.

The unidentified fixed-fee licensee was an existing per-unit licensee, who switched to a combination fixed-fee and per-unit license in the third quarter of 2008. The name of this particular licensee was never identified by IDCC. The fixed-fee part of this unidentified licensee is $1.4 per quarter. I can't rule out this particular licensee, as they may have amended their license a second time to drop the per-unit portion and go exclusively fixed-fee. If so, it would increase this unidentified fixed-fee licensee to $2.9m per quarter.

The other viable possibility is that Apple amended its fixed-fee license from $2.1m per quarter to $3.6m per quarter. They might have added LTE to the existing license, or there may have been some other provision in the license that triggered an amendment. As everyone knows, I have battled many posters over this Apple license being fixed-fee at only $2.1m per quarter for a long time. Now I will be one of the first to admit that finally at last the Apple license MIGHT currently be more than the initial fixed-fee amount.


rmarchma Share Wednesday, February 02, 2011 8:23:36 AM
Re: The Count post# 308747 Post # of 313214

Count thanks for the kind remarks. As to whether or not Apple is definitely the fixed-fee licensee that amended its license, resulting in an increase in the fixed fee amount, I think should be readily determinable after the Annual 10K report comes out. Hopefully, IDCC will once again break-out its total revenues by country. If so, then the key to unlock the mystery re Apple will be in the US revenue amount.



A recap of fixed-fee licensees and fixed amounts per licensee for 2010 linked as follows:

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=60268167