InterDigital Inc (IDCC)

[techinvester]

Loop, I agree the industry is doing the work for us. I have assembled multiple excerpts with links to simplify reviewing some key articles. I also agree with what appears to be the minority here that the purchase of the IDCC patent portfolio is not a dead issue. The due diligence will take time. Some of the time urgency and price competitive pressures may have been lessened by the Motorola purchase and the IDCC Board may not receive what they believe to be a fair offer in the timeframe potentially they are looking for but the need for patents by industry participants has not gone away and the perceived patent value is still higher now than prior to the Nortel auction.

The following is a short list of media excerpts supporting the need for patents by industry participants. FYI – Whether we sell the patent portfolio or we have to go the licensing route, I also believe IDCC will eventually prevail and be fairly valued. We may not like the timeframe however when it appeared a high sustained price level was near.

Reasons why the IDCC patent portfolio is still in play

The transcript
"The focus is now doubled. The focus is now not only on the patents that companies own ...also the cross-licensing arrangements in place...

We look at it as a 3-legged stool. You need to have the handsets, you need to have the operating system, and you need to have the wireless protocol. The deal today was a focus on handsets and operating systems. The wireless protocol was a deal focus of the Nortel portfolio a few weeks ago. So look to see who fills in that third piece of the puzzle for either Google or others in the market...

InterDigital is a company that we have been talking about with our clients for some time because we believe that their wireless protocols are very strong... Most people don't have the three-dimensional perspective... they are looking at the operating system and the handset and they are not focused on the fact that the wireless protocol is a critical piece of the puzzle. We think it (IDCC) is still an important asset...

I don't think today's action was the end of the story --I think there is other M&A activity to come. We're a big believer in the InterDigital Portfolio...

external link: http://video.cnbc.com/gallery/?video=3000039432

Here is also a link to the Ocean Tomo Nortel 4G/LTE portfolio comparison chart - http://www.oceantomo.com/system/files/Nortel_PR_LandscapeMap.pdf

Digital’s wireless patents, according to its CEO, are “deeper and stronger” than Nortel’s. A consortium led by Apple purchased Nortel’s thousands of patents for $4.5 billion last month beating out a bid by Google.

Source for excerpt - http://financialbin.com/2011/07/20/apple-and-google-bidding-for-wireless-patent-house-interdigital/


Microsoft also wanted to buy the company, according to Gigaom’s Om Malik. Sources told Malik that Microsoft was in lengthy talks with Motorola, apparently trying to acquire the handset manufacturer to boost its own patent portfolio. This, Malik says, prompted Google to step in swiftly to pay $40 a share, a whopping 60% more than Motorola’s closing price on Friday.

Source for excerpt - http://www.forbes.com/sites/parmyolson/2011/08/16/morning-tech-wrap-google-motorola-apple/?partner=yahootix

Analysts, however, said the possibility of Google still being interested in InterDigital cannot be ruled out.

“One can never have enough patents and the reasons they would be interested in Interdigital are still mostly intact,” BGC Partners analyst Colin Gillis said.

Some of InterDigital’s patents are essential for international telephony and will not overlap with those that the Motorola buy will bring home to Google, analysts said.

Source for excerpt - http://worldonlinebank.net/interdigital-skids-after-google-goes-for-motorola-mobility/


Google’s move may prompt Apple, Samsung or Microsoft to go after RIM for its intellectual property, Misek said.

‘Bulk Up’
“Apple has to respond, in my view, and to bulk up its patents a little more,” Misek said in an interview. “They have cash. There has to be a response. So do Microsoft and Samsung.”

Apple spokeswomen Natalie Harrison and Trudy Muller didn’t immediately return messages seeking comment. A spokesman for Microsoft declined to comment.

As a patent holder, RIM may be a less attractive acquisition target than other wireless companies, Michael Mahoney, senior managing director at Falcon Point Capital LLC, said in an interview.

“RIM is losing in the marketplace in the developed world,” Mahoney said. “In my view, RIM is highly unlikely to emerge a winner in the technology race. I don’t think their patent portfolio is likely to cover the most cutting-edge technology. The breadth of what Motorola has developed is orders of magnitude higher.”

Source for excerpt - http://www.bloomberg.com/news/2011-08-16/blackberry-maker-rim-left-in-no-man-s-land-after-google-s-motorola-deal.html


My (techhinvester) note on the risk to Android handset manufacturers – Please read the link from Olddog967 below before reading the last link. Can Google be trusted to play fair?
http://dealbook.nytimes.com/2011/08/15/google-turning-into-a-mobile-phone-company-no-it-says/

The rival handset manufacturers, which have been building devices with Google’s Android software since 2008, may have a harder time cranking out bestselling devices because Motorola Mobility may get earlier access to the newest Android technology, said Michael Gartenberg, an analyst at research firm Gartner Inc. The acquisition gives Google an incentive to favor Motorola Mobility, and association with the Internet company will give Motorola handsets a leg up in competing for consumers.

“This is their nightmare scenario,” said Gartenberg, whose firm is based in Stamford, Connecticut. “Google has gone from partner to competitor.”

Source for excerpt - http://www.businessweek.com/news/2011-08-16/google-undermines-samsung-led-handset-makers-with-motorola-tech.html