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Exclusive Focus Stock Report InterDigital Communications Corp. (Nasdaq:IDCC) Map of this 100 page exclusive report InterDigital’s Competitive Advantages Revised April 1, 2003 See also: Representative message board posts on this topic below Eighty percent of the digital cell phones in the world today (about 400 million) rely upon the technology called GSM (g). Since it is most economical for the companies that provide our wireless service to evolve these GSM devices towards WCDMA (g) for next generation use, they will certainly do so. The other option is to evolve toward Qualcomm’s cdma2000 (g) specifications, at a much higher cost. The WCDMA standard is backward compatible with GSM, while cdma2000 and its variants generally are not. InterDigital has made major essential contributions to the WCDMA standard and thus will benefit richly from the evolution to 3G. China, the world’s largest market, is a special case. It also provides InterDigital with a competitive advantage. The Chinese government clearly favors another 3G standard, TD-SCDMA (g), a relatively homegrown standard in China, and is pushing TD-SCDMA by freely allocating much more radio spectrum for use with this "homegrown" standard than WCDMA or cdma2000. TD-SCDMA probably has a market potential of 2% to 10% worldwide and 20% to 40% in China itself. The names associated with the TD-SCDMA standard are usually the Chinese firm, Datang, and the German Siemens. Although InterDigital is often overlooked by the media in stories about TD-SCDMA in China, the company holds substantial patented technology in the standard, probably as much as Datang or Siemens. (Siemens and InterDigital worked together in developing 3G technology in the 1990’s.) See the WirelessLedger.com exclusive report "China and TD-SCDMA," coming May, 2003 Also see "Understanding Intellectual Property." At the risk of being a bit too technical, it is important to understand two very important parts of the WCDMA and TD-SCDMA standards: FDD (frequency division duplexing) (g), used primarily for voice transmission, and TDD (time division duplexing) (g) used for the transmission of large amounts of data (Internet use, video, etc.). InterDigital has made many important (indeed, essential) contributions to both these aspects of WCDMA and TD-SCDMA. InterDigital is on a par with Nokia, Ericsson, NEC and the other largest WCDMA patent holders for FDD. But for high data capacity TDD technology, InterDigital has probably made more patented contributions to the standards than any other firm worldwide. (See "Understanding the Standards-Setting Process." Why is TDD (g) such a powerful technology for transmitting data? It is because TDD employs variable time slots, allowing much greater flexibility and efficiency. For certain WCDMA applications, FDD works just fine, as in voice and video conferencing where there is about as much data flowing in one direction as in the other – and where the transmission distances are greater (FDD macro cells each provide coverage to big chunks of territory). TDD is a major technological advance in two ways:
TDD allows service providers to offer very profitable high speed data transmission. Knowledgeable observers believe InterDigital owns the majority of TDD intellectual property rights (IPR) (g) worldwide. See "InterDigital Emerges as THE World Leader in TDD" (later in this report.
Permission is hereby given to reproduce and distribute free of charge this exclusive report provided that credit is given to WirelessLedger.com and copyright notice is provided. Copyright 2003 by WirelessLedger.com
Representative Message Board posts on this "InterDigital’s Competitive Advantages" portion of the Focus Stock report to come later
NEXT: The 30 Year Evolution of InterDigital’s Business Model Map of this 100 page exclusive report
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