InterDigital Inc (IDCC)

[blueskywaves]

Your post is too long so I'm going to break it down in more digestible parts so I have more time to address each part.

Let me start by demolishing your central premise.

It’s impossible to draw any valid conclusions from such a small sample............If you could come up with about 10 or so small-cap IPR technology companies with similar revenues to IDCC, like Rambus and ARMHY, then I would give much more credence to your study and conclusions.


LOL. I don't think you realize it but you just proved my point. The reason the sample is small is because very few companies have actually succeeded in making the licensing model work!

QCOM, for example, already generates more royalty income ($954M) than the entire global hardware IP industry (logic, memory, analog) which only generated $757M in licensing revenues in 2002.

http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=18920523

Outside of IBM, QCOM IDCC, ARMHY and RMBS, only Intergraph and Lucent have any credible shot at building a significant royalty business in the next 3-4 years. There are many patent houses like Timeline and Storage Computer, but their data is misleading because these patent houses typically consist of 2 lawyers and a manager of first impressions (sexy receptionist).<g>

Now just because very few companies succeed in the licensing business -- high litigation risks, high margin rewards -- doesn't mean that you have keep on using misleading metrics.