ASM-KOP-III
BILL MERRITT PRESENTATION- SEE SLIDES IN THE LINK BELOW
http://files.shareholder.com/downloads/IDCC/1885455531x0x576348/e15a49e7-606b-48 55-af4e-b7df5bd561d5/InterDigital%20ASM%202012_Final%20Really.pdf
CHALLENGES:
HANDSET VENDORS ARE CONSOLIDATING - NEGATIVE TREND 5 OR 6 PLAYERS WILL DOMINATE- LESS DIVERSIVICATION FOR OUR REVENUE STREAM
ECO SYSTEM VALUE SHIFTING - MOVING TO CONTEXT IN THE CLOUD
PRICE COMPRESSION- AS THE PRICE OF THE UNIT GOES DOWN, ROYALTY GOES DOWN
EVOLVING LEGAL ENVIRONMENT - FRUSTRATING
WHEN HANDSET PLAYERS HAVE SEVERAL CONSECUTIVE QUARTERS OF DECLINE, THEY TEND NOT TO RECOVER
APPLE AND SAMSUNG ARE THE HEAVY WEIGHTS - 70% OF PROFITS
OUR RESPONSE:
IDC PLANS TO ADDRESS THIS STRAIGHT FORWARD USING A MORE COMPREHENSIVE APPROACH - OUR PATENT CORE, NON CORE AIMED AT ALL THEIR DEVICES, NO JUST THE PHONE
R & D TEAM ADDRESSING COMPLIMENTARY TECHNOLOGY I.E. COMPRESSION TECHNOLOGY WHICH HAS NEVER BEEN DONE BEFORE FOR WIRELESS
TARGETED PATENT BUYS & ACQUISITIONS - WANT TO HAVE THE MOST/EVERY TOUCH POINTS ON THE PHONE AS WE CAN - SCREEN,MODEM ETC.TECH AIMED AT CONTENT AND SERVICE DELIVERY ALSO
STRONGER BARGAINING POSITION WHEN WE HAVE TO GO BACK TO APPLE,SAM ETC. WE ARE IN THE MIDST OF A COMPREHENSIVE EFFORT TO RESIGN SAM,APPLE AS WELL AS OTHES
6 TO 7 % PER YEAR PATENT GROWTH -
PATENT SALES-SIGNIFICANT OPPORTUNITY- SPLINTERING MOTIVATES NON-SIGNERS, OUR EXISTING LICENSEES TO RESIGN-ONE STOP SHOPPING - LESS COST
THEY WILL HAVE TO DEAL WITH 4 OR 5 LICENSORS INSTEAD OF 1
PATENT SALES ADDS TO OUR CASH FOR ACQUISITIONS AND BUYING COMPLIMENTARY PATENTS
PATENT LICENSING IN JOINT VENTURES WITH OTHERS- ADDITIONAL FURTHING SPLINTERING TO PRESSURE/ MOTIVATE LICENSEES TO COME TO THE TABLE
CASE FOR CONTINUOUS LOOP AGAIN FOR OTHER PATENTS AND ACQUISITIONS
STRATEGIC ENGINEERING VERY STRONG WITH APPLE, SAMSUNG AND NOKIA- DEVELOP STRATEGIC PARTNERS, RELATIONSHIPS
THESE HEAVYWEIGHTS HAVE TREMENDOUS SWAY IN THE STANDARDS BODIES
QUESTIONS AND ANSWERS
Q-CALCULATOR WITH MANY 000s, ENGINE AND TRANSMISSION, WC LICENSING TEAM, $800,000,000 PROJECTED REVENUE- ALL TALK -NO ACTION.WE ARE WAITING FOR THE RESULTS
CLONTZ - AGREE, WE ARE ACCOUNTABLE AND ACCEPT FULL RESPONSIBILITY - HOPE YOU WILL SEE RESULTS BY NEXT YEARS ASM
Q - WILL THERE BE A CLEAR SLATE AT THE END OF THE APPLE LICENSE
B M - THERE WILL BE A CLEAN SLATE JUNE OF 2014 FOR A FULL OPPORTUNITY WITH APPLE- NOT ONLY THE PHONE BUT ALL DEVICES THAT OUR PATENTS INTERSECT WITH
Q - THE SHARE PRICE IS DOWN - WHY ARE RSU'S NOT TIED STRICTLY TO IT
CLONTZ - THIS IS A DIFFICULT ISSUE ACROSS THE CORPORATE WORLD - WE'VE LOOKED AT DIVIDEND AND CAPITAL APPRECIATION BUT WHAT YOU DO ABOUT THE EXTERNAL THINGS LIKE GREECE
OVER WHICH YOU HAVE NO CONTROL
Q - VERNATX????? IS A VERY STRONG PATENT COMPANY AND HAS A MUCH GREATER MARKET CAP THAN IDC AND YET HAS LESS EARNINGS - WHY DOES THE MARKET VALUE THEIR PATENT PORTFOLIO GREATER THAN
IDCS? WOULD IT HAVE ANYTHING TO DO WITH A MARKMAN HEARING?
B M- THEY HAVE DONE A VERY GOOD JOB - THEY ARE BEING VALUED ON WHAT THEY COULD DO - THE QUESTION IS WHAT CAN THEY DO?
Q - WHAT IS MISSING FROM THE IDC PATENT POOL AND ACQUISITIONS THAT WE NEED MORE OF BOTH
B M - WE WANT TO INCREASE THE DIVERSITY OF OUR ACCESS TO THE PHONE AND OTHER DEVICES- STANDARDS PATENTS AND NON-STANDARD PATENTS HELP TO STRENGTHEN US
CLONTZ - WE HAVE SHIFTED OUR STRATEGY SOMEWHAT FROM SOMETHING THEY HAVE TO HAVE - TO SOMETHING THEY WANT TO HAVE
Q - HOW DOES SPINTERING MOTIVATE?
B M- RAISES THEIR COSTS - ONE STOP SHOPPING
Q - HOW TO WE INSULATE OURSELVES FROM DAMAGE AS LITIGATION DRAGS ON?
B M - A DISCOUNT IS AVAILABLE TO LICENSEES SOME TIMES AS MUNCH AS 30%. THAT DISCOUNT DISAPPEARS ON A DAILY BASIS FOR EACH DAY THEY ARE IN LITIGATION
Q - ESPY - WOULD LIKE TO HEAR FROM ALL BOARD MEMBERS NOT JUST THE CHAIRMAN
ASM SHOULD BE WEBCASTED NEXT YEAR
WHAT ARE YOU AND DIRECT MANAGEMENT DOING IN THE NEXT 24 MONTHS TO CAPTURE APPLE?
WE ARE CASH RICH-SHOULD HAVE GOTTEN A LINE OF CREDIT
CLONTZ - WEBCAST WILL BE CONSIDERED - A RECORDING OF THE MEETING IS BEING MADE AVAILABLE
BOARD MEMBERS CAME TO 24 MEETINGS LAST YEAR
APPLE HAS TREMENDOUS LEVERAGE - WE HAVE BEEN FOCUSING ON THEM EARLY
DEBT - HINDSIGHT IS DEBATABLE
B M - ONE PART OF APPLES BUSINESS IS WELL COVERED- WE ARE LOOKING AT ALL OTHER ASPECTS OF APPLES BUSINESS AND WANT TO TOUCH AS MUCH OF IT AS POSSIBLE
Q- DO NOT SPEND ANYMORE MONEY UNTIL MAJOR OEM'S ARE SIGNED
B M - THE SLIDES SHOW YOU THE SOBERING REALITY OF THE MARKET WE ARE DEALING WITH- SAMS & APPLE ARE VERY POWERFUL
WE STARTED EARLY, ARE EXTREMELY FOCUSED AND ARE APPLYING OUR COMPREHENSIVE STRATEGY EARLY
WE ARE SERIOUS ABOUT THE $800,000,000 PROJECTION OR WE WOULD NOT HAVE TIED OUR COMPENSATION TO IT EVEN IF IT IS A STRETCH
WE HAVE TO GET THE RATE WE NEED FOR ALL NEW LICENSEES TO MEET OUR OBLIGATIONS TO THOSE WHO AREALREADY LICENSED
MORE.....
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