Replies to post #230076 on InterDigital Inc (IDCC)

[rmarchma]

Bulldzr re the fixed $2m per quarter

You have it wrong. My fixed $2m per quarter is based on previous revised guidance and the current 10Q, it has nothing to do with the $20m total. However my THEORY that the $2m per quarter is for the first 10 quarters of the license is predicated on the $20m total, ie $20m / $2m per quarter = 10 quarters. No matter what the total fixed amount might be, it doesn't alter the $2m per quarter, at least for the first four quarters of the Apple license.

This is the split between per unit and fixed fee licenses accoring to the latest 10Q:

"The following table compares second quarter 2008 revenues to revenues in the comparable period from the prior year (in millions):


Per-unit royalty revenue $ 35.4 $ 34.0
Fixed-fee and amortized royalty revenue 20.5 18.6

Recurring patent licensing royalties 55.9 52.6"

The first numbers on each line are the second quarter of 2008, and the second numbers are the second quarter of 2007. Notice that the fixed fee revenues from the second quarter of 2007 = $18.6m. This can be recapped as follows:

LG ....$14.3m per quarter
Kyocera...$2.5m per quarter
Sanyo.... $1.1m per quarter
Lucent...$700,000 per quarter

Total....$18.6m

This was last year BEFORE the Apple contract, which was in the third quarter of 2007. All of the above fixed-fee numbers were disclosed in actual IDCC disclosures, such as press releases and 10Qs.

During the second quarter of 2008, the only additional fixed fee license since the second quarter of 2007 was Apple. The quarterly fixed fee amount increased $2m. The $2m increase has to be from Apple recapped as follows:

LG ....$14.3m per quarter
Kyocera...$2.5m per quarter
Sanyo.... $1.1m per quarter
Lucent...$700,000 per quarter
Apple....$2.0m per quarter

Total....$20.6m

When I can tie numbers down like this, I am very confident in my analysis. There was also a $2m increase between the two years in the fixed fee revenues according to the first quarter of 2008 10Q also.

Could it be more than $2m NEXT quarter? Possibly if there is one fixed amount associated with 2G, and a new fixed amount from Apple associated with 3G. However, I do not think Apple goes to a per-unit royalty for 3G based on Merritt's comments in the last CC, when asked that question. Merritt also did not make any reference to a new fixed amount from Apple for 3G, referring back to the initial financial disclosure for Apple in the Sept. 7, 2007 8K instead. Of course you can easily interpret his response as a "No Comment" too.

[Data_Rox]

oh my!...so emotional bulldzr....I seem to recall you were this way surrounding our discussion of the LG deal.... I won't bother you again, but will let you know I certainly won't sell my shares if the revenue directly from Apple is ~$2M per quarter....and I see no conflict with management's presentations if it is so.

R

my question was very specific to bulldzr and very specific in regard to direct revenue from Apple itself...which is what started the "discussion" based on analysis of the company's reported revenue.

stack royalties and potential royalty revenue from the manufacturer itself are not part of the question......nowhere did anyone say that these wouldn't come into play in the overall recognition from sales of 3G Apple product at some point.