InterDigital Inc (IDCC)

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Mschere, Your suggestion that Qualcomm could have retired 5700 workers and retained just 300 engineers and earned a greater profit on less revenue shows how short-sighted you are and why IDCC's business model is likely to fail. Qualcomm knows you have to continually provide value to collect the kind of returns you see. As those returns grow larger, the value contribution must also. Manufacturers will only go so far before you have a mass rebellion. They don't like the fact that IDCC is filing patent after patent simply in an effort to leverage payment for those patents, they want to see some value added to the product. That's what Qualcomm did when they developed IS-95 and then CDMA2000.

But back to your suggestion. Personally, I think 91% profit margins for the technology licensing division of Qualcomm is pretty damn impressive. $260 million in revenue and $236 million in pre-tax profits! Now I'm no longer intimately familiar with Qualcomm's accounting practices but it would appear that it only cost $24 million to license their technology. If only IDCC were that efficient!

But Qualcomm has people working on all fronts of leading edge technologies to advance the state of the art and they also have teams of people studying and measuring trends so they can be sure their development efforts are properly focussed. In comparison it makes IDCC appear to be a real back-woods company with their 300 total employees (including janitors, etc). This is not the picture of a company on the fore-front of a multi-billion dollar market and able to keep up with new developments, market trends, etc. That's absolutely required if IDCC ever hopes to compete in the chip market. As far as collecting IPR royalties, those will just wither up and die if IDCC cannot stay focussed on the leading edge.

Somehow me thinks their silence is more a reflection of being away from the leading edge than being caused by being too busy to communicate their latest developments.

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