Replies to post #242321 on InterDigital Inc (IDCC)

[loophole73]

Wilco

Mr. Gercensein made a few statements that the board of directors could not allow to happen. The worst was he planned to give the shareholders a matrix upon which the shareholders could grade the progress of management. This was an impossibility at the time of the making and the BOD decided that he should not continue. While many of us (I am the worst offender) want guidance right here, right now, there are times and companies such as Aapl that certain business deals cannot be put out on the streets. We must realize that the wireless sector is the definition of global business and is comprised of companies who operate under many and varied habits, customs and laws. While we would all like to have fair disclosure on every deal IDCC makes, they have to play by the rules of the wireless sector which have been established by large powerful companies sitting in other countries and jurisdictions.

Matters have loosened up considerably since the Gercenstein days and I believe IDCC is making an effort to be a bit more transparent. However, certain matters such as new products, licensing rates or joint ventures still must remain under the hats because any leaks could trigger actions from several competitors very quickly.

While we are on the subject of forecasting and disclosure, we might as well go over the differences between what Mr. Carpenter can report and what WM can say. Everything that WM says is bullet proof because of the warnings given to the audience concerning forward looking statements prior to his presentation. If WM's statements turn out to be wrong with respect to timing of new licensees or success guidelines for products, it is disappointing and some shareholders might sell their positions. However, while certain qualifications and reservations may be made by Mr. Carpenter, if his report turns out to be wrong, his firm can lose customers and he could lose his job. He has access to several companies in the industry who all are conveying forward looking statements. I am sure that the big companies are saying that they will not pay at all or more than x to IDCC and IDCC is saying that they expect to get y. These big companies remind me of the comedian, Cable Guy, when he says his girlfriend asked him to go get some sanitary napkins and he says "there is no way I would ever go into a store to buy sanitary napkins. So, I went down to the Walgreen's ......." The natural tendency by us sitting in our IDCC letter jackets and listening to "Be True To Your School" is to jump all over Mr. Carpenter's report. I know I was not happy with his last one. However, if he is wrong and IDCC out performs his estimates, it could actually help us in the long run. We should find out soon about Samsung and Aapl who should be selling enough 3g units to reach the 10% reporting number considering the high end prices of their phones.

MO
loop

[Learning2vest]

wilco, we will never know for sure what caused IDCC's board to move so quickly in releasing Mark Gercenstein, but will share one observer's opinion.

IDCC was doing some ground breaking work on two different fronts in wireless development at that point in time, i.e., 3G wcdma for cellular applications AND the 802.nx WLAN/WiFi/WiMax local area stuff. There was a lot of hype in the press at the time about how the "for free" WLAN stuff would explode into becoming "the next big thing" in wireless.

Guessing that hype had to be something of a concern for all of the mega firms making their living from cellular tech, i.e., the operators like Verizon, Sprint, AT&T, ect around the world, AND their equipment suppliers like Nokia, Samsung, Ericsson, ect. If the wireless world DID go the WLAN way, where would that leave them?

Key point that I think Mark Gercenstein missed was that all those cellular folks represented almost all of IDCC's market, i.e., they were the deep pockets customers for 3G IPR licensing.

IDCC had a wireless tech wizzard from France at the time with a title something like "Chief Technology Officer"(I forget his name, but he also got dumped soon after Gercenstein). His big passion was multi-mode, and he strongly believed that the future for wireless was WLAN for local and celluar just for connecting all those thousands of local cells.

While that concept might be technically feasible, you can imagine what all of the big cellular firms thought about it, i.e., "You want to do what? turn the wireless marketplace into a two-tiered structure with us only doing the backhaul network connections?? Yikes!".

Think about a world where all the user devices/handsets are WLAN and cellular tech is only used to do the backhaul connections of the locally owned and operated WLAN base stations. That is a horror story to the current cellular industry, i.e., to IDCC's customers.

Guess what IDCC did with Gercenstein calling the shots as CEO?(Here comes the punch line in my theory re what happened to those two market-blind, but otherwise sharp fellows.) IDCC's CTO got up his two hind legs at the 3GSM conference where the "who is who" of the cellular industry gathers each year and delivered his "It's gonna be a WLAN world, and IDCC is going to make it happen" story. Talk about putting doggie poot in the punchbowl, that HAD to have been a big stinking HORSE poot at the 3GSM conference.

As IDCC's CEO Gercenstein was responsible for that position and the decision to present it at 3GSM. In any case, he was abruptly removed a few weeks later and the CTO departed soon after.

Multi-mode is important, and it's great that IDCC has breakthru tech patented in that field, but take notice of how Bill Merritt talks about it today compared to the total marketing blunder under Gercenstein's watch. My hunch is that the cellular industry folks burned up the lines of IDCC's board menbers demanding somebody's head soon afer that 3GSM pitch, and they got two.