InterDigital Inc (IDCC)

[j70k]

IMO-For the large OEM's, this has always been about the NPE business model, and a process has been in place to destroy, discredit, delay, or at least control that model. Since IDCC has been the poster child for wireless NPE's, we have born the brunt of this coordinated effort. I believe that the strategic alternative was not successful for this reason. Nortel's auction went into the stratosphere, followed by Google's Motorola response, and if IDCC became a bidding war, then this would validate the NPE model for others. So far, these large OEM's have been able to control things with an unbelievable success rate at the ITC, which will now require a new strategy by IDCC. Arbitration seems to be the method of choice for the industry, and I am sure that, at least from the perspective of the major players, this will yield lower rates. Controlling this model through political pressures has been successful, so the margins going forward will probably be less for NPE's. By making adjustments to these new realities, IDCC can still be a viable and profitable player in wireless. With M2M increasing in value and the solutions IDCC has been offering to make wireless more efficient, IDCC is adjusting. When IDCC gains more traction, expect the final piece of control to fall into place, and that is a buyout at a price somewhere near the convertible bond.