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Data_Rox

04/26/03 1:36 PM

#21085 RE: redhot #21074

redhot- dual mode products that include 3G are not covered

from the announcement

The licensed products exclude any product compliant with Third Generation (3G) standards.

http://biz.yahoo.com/bw/030317/175481_1.html

and from the conf call

HOWARD GOLDBERG: Sheika, I would like to address one issue that has been raised to us by a number of people. And that is, what happens in the post 2006 environment under the existing license agreements at 2G and 2.5G licensing agreements. Let me say first that the agreements were negotiated to cover a normal commercial terms, which generally runs for 5 year periods. So this is pretty consistent with usual type of agreements. And then you have a reopener for negotiation. In the period that then becomes open for negotiation there are opportunities for InterDigital to realize additional 2G and 2.5G licensing revenues based upon the incremented patent portfolio. The patent portfolio enhancements that we get going forward from today.

Having said that, I would like to focus everyone on a very central issue, which is, if you read (ph) in the press release that a handset includes 3G functionality, then it's not licensed under this agreement. We're not licensing piecemeal a handset having 3G functionality would be licensed under any separate 3G agreement that we may enter into with Ericsson. While we don't have transparency on a post-2006 marketplace, it's our view that the infrastructure market for 2 and 2.5G in a post-2006 will be very small, if existent at all, and it probably will exist to a very small degree. It will be primarily 3G infrastucture in terms of new deployments. And we believe that the terminal devices will almost universally, at that point in time, have 3G functionality.

The addition of the additional mode, it will be well integrated. The delta (ph) cost for the additional mode will be very small at that point in time. And we believe that for sake of uniformity of manufacturer, as well as coverage for the individual consumer, that everyone purchasing a handset will want 3G functionality at that point in time, which puts it under a new license agreement. So I just wanted to offer that input and clarify those points.




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mschere

04/26/03 1:56 PM

#21093 RE: redhot #21074

IMO: IDCC is collecting approx. 1/2% royalty from all for 2G..But 3G as per NEC and Sharp is nearly 2%..