Interdigital, Inc. · NASDAQ:IDCC

Interdigital — Investor Day (December 2018)

42 slides from Interdigital's investor day presentation, Dec 10, 2018

Slide 2: Forward-Looking Statements
Forward-Looking Agenda Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding InterDigital, Inc.’s current beliefs, plans and expectati
Slide 4: InterDigital Labs
InterDigital Labs In Our Labs A world-class R&D lab • 5G & Beyond Cellular Standards that drives InterDigital’s • Wi-Fi Standards technology development • IoT Standards & Platforms • mmW Access and Transport Systems and is a respected • Spectrum Sharing & Unlicensed Spectrum participant in internati
Slide 5: Edge Computing
Edge Computing 5G promises ultra broadband connectivity and extremely low latency. To achieve this without extreme network bottlenecks and huge network infrastructure you simply need to be close to the users… …and running a service-based architecture on low-cost IT-like hardware. High Quality Autono
Slide 6: EdgeLink – Millimeter Wave Mesh Networking
EdgeLink™ – Millimeter Wave Mesh Networking SDN-based Multi-Hop Mesh Network Composed InterDigital’s of Gigabit, Low-Latency Millimeter Wave Links Cloud-Based Software Platform • 60GHz Spectrum with high-gain antennas • Multi-tenant, multi-service level transport slice management INTERDIGITAL MESH L
Slide 7: 5G Edge – Mission Critical Automation Demonstration
7 5G Edge – Mission Critical Automation Demonstration InterDigital AdvantEDGE™ InterDigital UTM System Mobile Edge Emulation Platform UAV (Drone) Traffic Management (UTM) deployed in AdvantEDGE™ • Agile experimentation and validation environment for Edge applications and services • A drone revolutio
Slide 9: Agenda
Agenda • InterDigital Transformed – Bill Merritt • Broader Technology Platform • Large New Markets • Strengthened Management Team • Same DNA • Driving Deals, Driving Value – Kai Öistämö • Innovation Excellence • Closer Customer Engagement • Financial Discipline – Rich Brezski • Revenue Strength • Co
Slide 10: Why InterDigital, More than Ever
Why InterDigital, More than Ever Invention, Collaboration & Contribution Over four decades of pioneering wireless innovation Now combined with a portfolio reflecting decades of fundamental video expertise Brought to market through substantial contributions to global standards That drive a more power
Slide 11: A Portfolio that Combines Depth and Breadth Across Technologies
A Portfolio that Combines Depth and Breadth Across Technologies IDCC The InterDigital portfolio now brings together >36,000 patent assets that show enormous strength in key wireless and video technologies but also broad diversity across the entire gamut of technology needs. Cellular (incl. 3G, 4G, a
Slide 12: Contributing Deep wireless + a video portfolio
Contributing Deep wireless + a video portfolio Technology engagement… that reflects: Worldwide >50/yr on Two Major 1,000+ $1B+ journal and conference Fronts contributions invested in papers published to 3GPP >100/yr R&D since 2000 ~100 contributions to technical papers standards bodies & presentatio
Slide 13: 2018: A Global Footprint
2018: A Global Footprint • California • New York • Pennsylvania • Montreal • Berlin • Brussels • Delaware • Maryland • Washington, D.C. • London • Shanghai • New Jersey • Paris • Indiana • Rennes • Seoul © 2018 InterDigital, Inc. All Rights Reserved. 13
Slide 14: Two Tech Footprints, Driving Three Interconnected Licensing Opportunities
Two Tech Footprints, Driving Three Interconnected Licensing Opportunities CONNECTED CONSUMER DEVICES ELECTRONICS INTERNET OF THINGS © 2018 InterDigital, Inc. All Rights Reserved. 14
Slide 15: Handset Shipments – Slowing Growth But at Significant Altitude
Handset Shipments – Slowing Growth But at Significant Altitude Worldwide Headset Shipments Subscription Penetration - Q1 18 (% of population) 2,500 CAGR 1% 126% CAGR Western 15% 2,000 Europe 142% 2,000 1,887 Central and 272 Eastern Europe 108% 1,432 North America Excl. 2G 1,500 CAGR 86 Excl. 2G 1,23
Slide 16: Wearables and 5G Penetration Drive New Volume
Wearables and 5G Penetration Drive New Volume Historically each generation of air interface technology has unlocked new user experiences on mobile. 5G will 1980s 1990s 2000s 2010s 2020s enable enhanced mobile broadband Analog Digital Phone Digital calls, messaging All IP-based across multiple device
Slide 17: 5G – More Opportunity than Previous Generations
“Private 5G networks could also create a huge market for technology companies that manage these networks or sell related devices… Harbor 5G – More Research, a US-based research and consulting firm that specializes in IoT analysis, estimates that the market will grow approximately 30% a year Opportun
Slide 18: Consumer Electronics: With New Scale Comes New Opportunity
Consumer Electronics: With New Scale Comes New Opportunity Vision Audio IoT / Other • TV Displays and Computer • Wireless Speakers / Smart • Wearable Devices Display Monitors Assistants • Imaging • Set Top Boxes, Media • Soundbars • Cameras / Camcorders Adaptors, Streamers • Hi-Fi, AV Receivers, • D
Slide 19: With License to Play Based on Position in Key Technologies
With License to Play Based on Position in Key Technologies Gateway / OTT Game Smart Smart TVs STBs Cameras Drones Wearables Router Devices Consoles Assistant Home Cellular ✓ ✓ ✓ ✓ ✓ WiFi ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Audio ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Video ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Display ✓ ✓ ✓ ✓ ✓ Battery ✓ ✓ ✓ ✓ ✓ Speech ✓ ✓
Slide 20: Video and Wireless – the Keys to the Growing Segments of the CE Space
Video and Wireless – the Keys to the Growing Segments of the CE Space OLED TV Winners & Losers in CE by Category Wireless Speakers Game Consoles Worldwide Unit Growth Forecast 2017 vs 2016 Media Streamers Wearables Soundbars Smartphones Headphones STB LCD TV AV Receivers Hi-Fi Systems Personal A/V C
Slide 21: An ~$800B Market That We've Already Begun to License
An ~$800B Market That We’ve Already Begun to License Computer Displays TV Set-Top Box Mobile OTT Devices PCs Loudspeaker Network Equip. Game H/W Cameras Consumer Wireless Drones Speakers Wireless Active Program Program Launched Program Under Eval. Wearables Headphones Smart Home Source: Futuresource
Slide 22: IoT Connectivity – An Expanding Market
IoT Connectivity – An Expanding Market Despite slower-than-expected start, IoT market expected to reach installed base of >62B devices by 2022… Average with cellular technologies topping 7B devices including: 2017-2022 CAGR • 585M connected cars, 22% CAGR (2017-2022) of all cellular IoT • 345M retai
Slide 23: The Rise of the Synchronized Device Landscape Extends Wireless Opportunity
The Rise of the Synchronized Device Landscape Extends Wireless Opportunity Source: Jefferson Wang, IBB Consulting, 9/18/17 © 2018 InterDigital, Inc. All Rights Reserved. 23
Slide 24: Massive New Services Opportunity Breaks the Connectivity-Only Revenue Model
Massive New Services Opportunity Breaks the Connectivity-Only Revenue Model Operator IoT TAM by Value Chain (B) 2023 Operator IoT TAM by Vertical (B) $300.00 Retail & Payments Security 3% Transportation $250.00 3% Healthcare 2% 2% Modems $200.00 Network Connectivity Energy & Utilities 5% Connection
Slide 25: Growth Drivers that Build Logically Over Several Years
Growth Drivers that Build Logically Over Several Years LTE CYCLE + VIDEO Expected CONSUMER ELECTRONICS 2018 Drive recurring IoT Revenue annual 5G of $302- revenue base to $500M 308M* Build licensing base in $400B market An installed base of >62B devices by A new market 2022, of which paradigm, that
Slide 26: A C-Suite and Board… Transformed
A C-Suite and Board… Transformed …and a Board of Tech and Industry Leaders • Doug Hutcheson (ex. Leap Wireless) Bill Merritt Kai Öistämö Eric Cohen Dr. Henry Tirri Jeffrey Belk • Joan Gillman CEO COO Chief Development Off. CTO EVP, Bus. Dev. (ex. Time Warner Cable) 23-year career at Nokia, Former SV
Slide 27: The Living Network
The Living Network™ Continuing to Guide R&D and Investments CONTENT CONTEXT CONNECTIVITY What type of data, What is the situation and What network, devices and for what purpose and need, and how does that assets can be deployed to with what security & impact connectivity and ensure a constant flow o
Slide 28: Agenda
Agenda • InterDigital Transformed – Bill Merritt • Broader Technology Platform • Large New Markets • Strengthened Management Team • Same DNA • Driving Deals, Driving Value – Kai Öistämö • Innovation Excellence • Closer Customer Engagement • Financial Discipline – Rich Brezski • Revenue Strength • Co
Slide 29: Consistent Leadership in Major Cellular Standards
Consistent Leadership in Major Cellular Standards In studies by third-party analysts we’re aware of since 2012 that have evaluated the share of patents and applications that are likely essential to 3G and/or 4G standards... 7% – InterDigital’s share of likely LTE InterDigital’s share of likely 3G 10
Slide 30: …and Our Traditional Position of Strength in Wireless Continues
• One of the strongest portfolios in the industry, with >10,000 assets related to 3GPP cellular technologies alone • 3G covers all major deployed standards including WCDMA …and Our high speed downlink and uplink packet access, HSPA(+) Traditional • 4G covers all currently deployed standards includin
Slide 31: A Recent History of 5G Innovation
A Recent History of 5G Innovation 2018 World’s 1st 2014 2016 2016 2017 2017 demonstration of service-based 5G World’s 1st World’s 1st World’s 1st Invited by GSMA World’s 1st control plane WiGig-based long-term demo successful trial of to present on successful mobile mesh backhaul of integrated IP-ov
Slide 32: TCH Portfolio Makes InterDigital Instant Player in Video
TCH Portfolio Makes InterDigital Instant Player in Video Combined ~8,000 assets, with Digital TV (ATSC, DTV, approximately 1/3 covering standards-based technologies DVB) Real-time video Covers various video standards streaming technologies including: • H.265 (High Efficiency Video Broadcast Coding)
Slide 33: Rapid Expansion of Avenues for Engagement with Customers
Rapid Expansion of Avenues for Engagement with Customers Restructuring our approach, and expanding our footprint and engagement strategy where our customers are • All customer engagement – Labs, licensing, partnerships, etc. – now key area under new COO with customer-side experience • Launch of busi
Slide 34: Video Now Joins Wireless as an Avenue for Research Engagement
Video Now Joins Wireless as an Avenue for Research Engagement • Next-gen video coding • H.266 and MPEG-Immersive, including Point cloud compression and Omnidirectional media format (OMAF), enabling user-directed video experiences • Light fields and associated VR/AR/MR applications • Image processing
Slide 35: Agenda
Agenda Agenda • InterDigital Transformed – Bill Merritt • Broader Technology Platform • Large New Markets • Strengthened Management Team • Same DNA • Driving Deals, Driving Value – Kai Öistämö • Innovation Excellence • Closer Customer Engagement • Financial Discipline – Rich Brezski • Revenue Streng
Slide 36: Revenue Base Built on a Broad Range of Customer Relationships
Revenue Base Built on a Broad Range of Customer Relationships ~$660M Currently license ~50% OF CONTRACTED CASH Including the RECEIPTS THROUGH 2022 of all smartphones TOP 3 not including additional licenses or per-unit shipped worldwide VENDORS payments of the 60+ licenses & amendments ~90% we’ve sig
Slide 37: Diligent Goal-Tracking Across All Our Programs
Diligent Goal-Tracking Across All Our Programs LTE CYCLE + VIDEO CONSUMER ELECTRONICS IoT Currently at 5G recurring licensing A new effort at the revenue of company, but based Stated goal of $75- >$300M, with a on historical revenues 100M by late 2021. of the sector we’re Currently, initial wins Gro
Slide 38: Post-Acquisition Recurring Costs
Post-Acquisition Recurring Costs Our Q3 ‘18 recurring costs were <$1 million above our 2017 run rate. 2017 Q3 ’18 Q3 reflected only two Operating Expense $ 231.4 62.2 months of the Capitalized Prosecution 34.9 9.3 acquired Technicolor Less Depreciation & Amortization -56.8 -17.5 Patent Less Litigati
Slide 39: The Transition
The Transition We expect to incur an By April 2019, we expect to We currently expect to do additional $5 - $10 million of see our recurring cost levels so within the original operating expenses and begin to come back down, timeline of no more than capitalized prosecution costs and we remain committe
Slide 40: A Straightforward Path to Get There
A Straightforward Path to Get There Portfolio pruning will result in a less expensive portfolio that is bigger than either, better than both Funding internal and external video research by redirecting research dollars that we already focused on non-wireless technologies Some redundancy in G&A Our pa
Slide 41: Continuing Our Practice of Returning Value to Shareholders
Continuing Our Practice of Returning Value to Shareholders • Since July 1, 2018, we have Share Repurchase Authorization invested approximately $80 $700.00 million to repurchase more $600.00 than 1.2 million shares $500.00 • We have announced $400.00 another $100 million increase $300.00 to the autho

InterDigital — Investor Day (December 2018) on 6ix

Interdigital — Investor Day (December 2018)

Slide 1: Investor Day 2018

Slide 2: Forward-Looking Statements

Slide 3: Investor Day 2018: a brief introduction and a few demos

Slide 4: InterDigital Labs

Slide 5: Edge Computing

Slide 6: EdgeLink – Millimeter Wave Mesh Networking

Slide 7: 5G Edge – Mission Critical Automation Demonstration

Slide 8: Investor Day 2018

Slide 9: Agenda

Slide 10: Why InterDigital, More than Ever

Slide 11: A Portfolio that Combines Depth and Breadth Across Technologies

Slide 12: Contributing Deep wireless + a video portfolio

Slide 13: 2018: A Global Footprint

Slide 14: Two Tech Footprints, Driving Three Interconnected Licensing Opportunities

Slide 15: Handset Shipments – Slowing Growth But at Significant Altitude

Slide 16: Wearables and 5G Penetration Drive New Volume

Slide 17: 5G – More Opportunity than Previous Generations

Slide 18: Consumer Electronics: With New Scale Comes New Opportunity

Slide 19: With License to Play Based on Position in Key Technologies

Slide 20: Video and Wireless – the Keys to the Growing Segments of the CE Space

Slide 21: An ~$800B Market That We've Already Begun to License

Slide 22: IoT Connectivity – An Expanding Market

Slide 23: The Rise of the Synchronized Device Landscape Extends Wireless Opportunity

Slide 24: Massive New Services Opportunity Breaks the Connectivity-Only Revenue Model

Slide 25: Growth Drivers that Build Logically Over Several Years

Slide 26: A C-Suite and Board… Transformed

Slide 27: The Living Network

Slide 28: Agenda

Slide 29: Consistent Leadership in Major Cellular Standards

Slide 30: …and Our Traditional Position of Strength in Wireless Continues

Slide 31: A Recent History of 5G Innovation

Slide 32: TCH Portfolio Makes InterDigital Instant Player in Video

Slide 33: Rapid Expansion of Avenues for Engagement with Customers

Slide 34: Video Now Joins Wireless as an Avenue for Research Engagement

Slide 35: Agenda

Slide 36: Revenue Base Built on a Broad Range of Customer Relationships

Slide 37: Diligent Goal-Tracking Across All Our Programs

Slide 38: Post-Acquisition Recurring Costs

Slide 39: The Transition

Slide 40: A Straightforward Path to Get There

Slide 41: Continuing Our Practice of Returning Value to Shareholders

Slide 42: Investor Day 2018