InterDigital Opens San Diego Outpost in Quest to Ease “Bandwidth Crunch”

InterDigital (NASDAQ: IDCC), a company that invents new wireless technologies and counts Samsung, Research in Motion, and HTC among its biggest customers, has opened a satellite R&D lab in San Diego. The new facility is initially focused on developing technologies to improve the capacity of wireless networks, according to Bill Merritt, the company’s CEO.

Merritt, who plans to be on hand for InterDigital’s open house in San Diego Thursday evening, describes the move as a kind of homecoming for the wireless innovator based in King of Prussia, PA. InterDigital was known as a “TDMA Company” during the 1990s and a counterweight to Qualcomm’s rival CDMA-based wireless technology standard. Merritt says InterDigital’s first wireless R&D program was based in San Diego in 1985, and the inventions created as part of that project were used in GSMs around the world. (For the wireless-jargon-impaired, TDMA stands for Time Division Multiple Access; CDMA is for Code Division Multiple Access; and GSM is for Global System for Mobile Communications.)

Through its 1992 acquisition of SCS Mobilecom/Telecom, which specialized in Spread Spectrum CDMA technology, InterDigital says it became one of the few wireless technology developers with expertise in both TDMA and CDMA technologies.

Like Qualcomm, InterDigital generates much of its revenue from licensing its technologies throughout the wireless industry. The two companies followed sharply different trajectories, however. Today Qualcomm ranks as the largest wireless chipmaker in the world, with net income of $3.25 billion on revenue of nearly $11 billion in fiscal 2010. In comparison, InterDigital posted net income of $153.6 million on 2010 revenue of $394.5 million.

Nevertheless, InterDigital says it plays a fundamental role in developing core technologies for mobile devices, networks, and services. Merritt, who has overseen the growth of InterDigital’s patent licensing business, says the company’s current strategic focus falls into what he calls three general categories of “bandwidth crunch.” He describes those categories as “building wireless pipes” through spectrum optimization, “connecting more pipes” through inter-network connectivity and mobility, and using developing “better pipes” through improved compression algorithms and what the company calls intelligent data delivery.

“We bring technologies into the worldwide standards bodies that create the standards for the next generation wireless.” Merritt says. “It’s basically a giant joint R&D process among many, many companies. And they build and design the specifications for these new systems, which are used to make sure that a Nokia handset can talk to an Ericsson base station.”

As for the new San Diego facility, Merritt says, “We’re following a … Next Page »

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Bruce V. Bigelow was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Follow @bvbigelow

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