InterDigital Inc (IDCC)

[blueskywaves]

But, in 1999, InterDigital dropped all previous plans (for development of wireless devices) and adopted an entirely new business plan - participation in standards bodies for the development of 3G technologies

Great point. The BCDMA deal in 1996/1997 was the first major step in IDCC's attempt to recover from the 1995 Motorola debacle. The 1999 Nokia deal marked the true start of IDCC's financial turnaround. And as you've pointed out, it also marked the shift from IDCC's previous confrontational legal strategy to its current collaborative strategy through the standards board. The 2003 Ericy settlement marked the end of IDCC's financial turnaround and the start of IDCC's growth stage.

IDCC starts off its growth stage with an annual revenue base of $200M-$300M+ highly achievable during the next 2-4 years and an initial war chest of at least $400M to finance the cash burn of its growth plans which now include M&A.

I think that M&A's strategy is still fluid. However, it is worth noting again that one of the first steps they took after the 3/14 ERICY deal was to promote the ex-venture capitalist who joined IDCC in 2000, at the peak of the Venture Capital boom and, interestingly enough, while IDCC's stock was in the process of giving up practically all its late 1999 gains.

From what we can tell of the M&A strategy that they are still putting into place, I think we can expect to see them do more Tantivy-like deals or deals with pre-revenue companies that have intellectual property that can improve the commerical appeal of IDCC's patent portfolio. As mschere pointed out, the IPO market remains moribund so it remains a buyers market for many areas of technology.

More thoughts on M&A later.