Songioan very good article on IDCC and Merritt. Thanks for finding and posting. Corp_Buyer thanks for posting the link to the article also. I think Merritt is certainly saying the right things, and is really trying to accomplish what he is saying.
Merritt appears to be changing the underlying philosophy witin the the company toward: (1) focusing on execution of the business plan, (2) emphasizing profitabilty and cost containment, (3) enhancing shareholder value, (4) seeking reasonable business resolutions with litigation as the last resort, (5) developing good relationships throughout the entire wireless industry, (6) keeping IDCC on the cutting-edge of wireless technology development, and (7) making IDCC more understandable to Wall Street. Some passages from the article that I really liked, which emphasize these business themes of Merritt, as follows:
(1) "Over the past five years, we made a conscious and systematic effort to change the perception of us as a company that developed proprietary technologies, to one of an organization that develops mainstream solutions....InterDigital's strategy remains the same, which is to help shape the next mainstream wireless communications technology. The recent change in management was not a change in the strategic plan, but a desire to execute that plan better."
(2) "there are tactical changes we will make. Among those is a higher focus on creating greater levels of profitability. Over the past few years, we have seen our cost line and revenue line increasing in lock step.... However, the goal of profitability - more so than an unfettered love of technology - needs to be the driving force behind the business....Financially, I would like to see InterDigital earn a higher level of profit as we grow our revenue streams. That means not increasing staff or cost just because we signed a new deal....On the product side, we must take development beyond the lab and up to the point where a customer can see it work. At the same time, we also need to know when a product-based technology program is not going to be profitable and get off the bus."
(3)"My emphasis on cost doesn't come from any cash needs; the company is financially healthy -- we have a solid revenue stream, we have a cash position of around $100 million and we don't carry any debt. However, I believe that we can better leverage our capital and operational structure to enhance shareholder value."
(4)"People with certain agendas sometimes try to label us as litigious but we are not....In all of our licensing dealings, our approach has always been to resolve business matters in a reasonable way. Sometimes you need to go into litigation but it's not the preferred route. In our business, there's always going to be some controversy, and the fact we are able to stand up to anybody serves us well. Nokia took a lot of shots and we did fine. Sometimes people underestimate InterDigital"
(5) "As far as relationships go, we have had a thriving patent licensing programme, with a lot of opportunities with the companies we know through those agreements. We have a good reputation in the industry and we have always tended to conduct business in a business-like manner.....Having connections at all points in the value chain is fundamental to InterDigital's business. We have good dialogue with operators, equipment producers, semiconductor suppliers and now, of equal importance, the people who are developing the applications. These relationships are very important to us because not only are they are our direct and indirect customers, they provide valuable insights into the anticipated needs of their ultimate customers and what technologies will most effectively help them make good on their business plan. Their business issues and technology needs certainly influence how we shape our technology roadmap and direction."
(6) "ME: So the aim is to reduce the risk of exposure to just one technology area?
BM: That's right. We have diversified our technology development to technology areas ranging from 3G cellular core technologies to interference management, as well as other areas....At the end of the day, we succeed because we are a very strong systems house. We are not just a software company --- we understand how the whole system works and interacts. An example is our HSDPA solution... We employed our advanced receiver design which is scaleable with HSUPA in mind. Our solution can be migrated to HSUPA without the need to tear it out and redo the whole thing. And while you do need to get to market fast, you also need to produce solutions that have legs, and can be used for some time. Our systems capabilities also make us a very valuable contributor in the standards bodies. The technical contributions we make solve real problems.
The next area where we have done a lot of work is in convergence and the interworking between different wireless access technologies. ....Then there are new spaces. We are looking at concepts that address what a consumer's going to want in the future, and what's the minimum technology you need to get the job done. For instance, back in the early 1990s we were adamant that narrowband CDMA wasn't enough and believed we had to go further in bandwidth. We were right...Next we can look at things like advanced mesh networking or the digital home; that's the fun part of the job. You place a bet on developing technologies that may be pretty far out in time and help guide the development as the market emerges."
(7) "I think we are less understood in financial communities because we don't fit easily within any sort of defined box. Perhaps this is because our performance against our business model is continuing to evolve; we have multiple ways of monetising our technology assets and are continuing to make progress in building the multiple revenue streams that Wall Street can value. It will take some time, but I think we are making the company more understandable and will continue to do so going forward."
AI
