My slant on the revised Marsala research report:
1) Marsala seems to give weight to the Nokia argument that that the Ericsson settlement did not trigger the royalty rate because Ericsson had lost signifigant market share. Well, I don't think that will be a valid legal argument unless the contract with Nokia specifies that Ericsson must have a minimum market share below which the rate would not be triggered. And I doubt that is the case.
2) Marsala does include the 2G money IDCC claims Nokia owes in his earnings and cash flow model for 2004; yet he excludes any revenue from 3G royalties from Nokia. But isn't it reasonable to expect a settlement with Nokia will also incorporate a rate for 3G and some advance royalty payments?
3) Marsala does not monetize any of IDCC's development expenses that he estimates in his model. Surely these millions of dollars invested in engineers and product designers will produce substantial revenues. Wall St. and analysts give no value to this but we know that they will produce great value.
4) Finally, Marsala does not recognize that IDCC has much greater negotiating power in arriving at 3G agreements than it had in dealing with Ericsson on 2G.
For these reasons I think the Marsala report is flawed.
Incidentally I think Nokia's allegations of improper trading will come back to haunt them.
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