WirelessLedger.com for investors in wireless communications technology development

There are five basic types of investments in the wireless communications industry:

1. The service providers:
The companies with names in the United States like Verizon, AT&T, Cingular, WorldCom and others. In other parts of the world look for Hutchison, Orange, etc. When you have a cell phone you send your monthly fees for services to these folks. They decide where to locate base stations, towers and offer various consumer packages.

Risks: associated with investing in the operators:
Some operators may be over their heads in debt, having paid too much in some European countries for spectrum rights for upcoming next generation 3G (g) communications. Currently, there is a highly competitive market in which the successful firms will devour the less clever ones. Choose wisely.

Rewards:
Immense amounts of revenue are generated worldwide by cell phone and other wireless device subscribers. If operators can successfully generate fresh streams of revenue by charging extra for communicating the immense packets of data required for effective Internet access, multi-media messaging and other applications, earnings could be very strong for the winners.

2. The mobile phone and base station infastructure manufacturers:
You see their names on your cell phones and other wireless devices. Names like Nokia (35 percent market share), Ericsson (strong base station sales), Sharp, Samsung, Motorola, NEC and others.

Risks: associated with investing in the cell phone and base station manufacturers:
The manufacturer needs to have attractive products at a good price. Motorola suffered from "dowdy" cell phones in the late 1990's. Nokia dominates the cell phone market (35%) and plays hard ball. Manufacturers have been lending money to sometimes shaky operators to ensure that next generation (3G) service would launch well. Although most tech glitches have been worked through, inevitably, some remain. It is still a bit too early to determine how successful the much anticipated 3G (g) wireless communication will be.(see WirelessLedger.com's exclusive report "3G, Fact or Fiction?"

Rewards:
800 million cell phones averaging almost $125 each are sold worldwide each year. When demand picks up in parts of the world with limited service yet (e.g. China, India, Russia), the market will expand greatly. Most people in less developed parts of the world will own a wireless phone as their "first phone," completely by-passing the much more expensive copper-wired phone systems. As demand for 3G grows in 2006-2007 and beyond, current devices will be discarded for new ones.

3. Component manufacturers: We refer here to the makers of the chips, integrated circuits (IC) (g), systems on a chip (SoC) (g) miniature microphones, cameras, speakers, and antennas for terminals like cellphones or base stations. Texas instruments, Infineon Technologies, Motorola, Intel and QUALCOMM are some of the leading component manufacturers.

Risks: associated with investing in the component manufacturers:
Overhead costs are immense to build and maintain a competitive plant for chip fabrication. This is a highly competive business worldwide, with constant research and development essential to staying competive. Profitability seems to run in cycles so firms have to be prepared for lean years. Future winners and losers are hard to predict, with some of the "mighty" having taken unexpected falls from in recent years.

Rewards:
In cycles, the component business is lucrative, as in times of heavy worldwide demand or when a firm has a product significantly superior to others. As 3G (g) catches on, there will be a demand for components for possibly billions of new wireless devices.

4. Application developers: These folks develop ways to use cell phones, PDAs, smart phones, and wireless laptop computers. They are looking to develop "killer applications," (some feature that drives the market) as well as normal applications. Microsoft is trying to break into this market with its new "application platform."

Risks: associated with investing in the application developers:
It is difficult to determine which wireless applications will be the big winners. What looks promising in one part of the world may be a bust elsewhere because of cultural and other differences. There will be a shoot out between Microsoft (the new wireless application kid in town) and current leaders Nokia, Motorola, Ericsson, NEC, Siemens and others over the "application platform" (Microsoft is taking on the Symbian platform sponsored by most industry leaders.) Microsoft needs to make inroads into wireless in order to keep growing and will bring heavy pressure on the others.

Rewards:
Whatever firms develop successful "killer applications" could be highly profitable. Also profitable will be the developers of niche applications who can keep development and other costs under tight control.

5. Air interface (g) developers: These firms focus on how cellphones, pda's, laptops and other wireless devices communicate with each other and with their respective base stations and towers. These firms do not develop "applications." Rather, they are developing patented technology for clear, fast communications of voice and the immense mounts of data necessary for the applications currently being designed and tested.

The firms in No.5 above develop the patented technology that makes cellphones and other devices, whoever manufacturers them, communicate with each other with maximum efficiency. Whatever the application may be, it finally boils down to voice or data being transmitted and received via radio waves through the air. Before long, cell phone service subscribers will expect to be able to maintain communication SEAMLESSLY from WiFi service at a Starbucks or an office building to a location without WiFi, like their vehicle. Vehicles travel 70 miles an hour along interstate highways, seamlessly passing from one cell tower to another. The air interface (g) technology must function perfectly whatever the weather, or signal strength. It has to work flawlessly between tall buildings, through terminals in airports and into remote rural areas, mountains and valleys. Next generation service (3G) (g) entales moving immense quantities of data required for natural looking moving video and sound plus Internet access -- all in moving vehicles, even under incredibly adverse circumstances.

Risks: associated with investing in the air interface (g) developers:
There are at least 100 firms with patented technology included in the new international standards for next generation (3G) and wireless devices. Some have technology that is "essential" (wireless devices will not work without this piece of technology) while others have "commercially attractive" technology. The former is far more valuable. Some firms have contributed only a very small part of the standard and will receive royalties of perhaps 1/100th of 1 percent. (Not insignificant for a small firm, given the potential size of the market.) Others (like QUALCOMM and InterDigital) have contributed hundreds of parts of the standards and will be eligible for royalties of 1% - 5%of the billions of dollars spent on 3G products over the coming years. Device manufacturers (like Nokia, Ericsson, NEC, Siemens, etc.) may have major portions of their patents written into the standards but will not receive royalties from many other manufacturers because they will be cross licensing, with no money changing hands. The standard setting process for 2G was far different from 3G. Some firms have had a difficult time collecting the royalties apparently due them for their patented technology. Others, like QUALCOMM, have been extremely successful collecting royalties to date. See the special reports "Understanding IPR" and Understanding the Standards-Setting Process". Remember that the future success of 3G is only now becoming apparent. It is becoming widely available in various parts of the world beginning in 2006-2007. See the special report, "3G, Fact or Fiction?"

Rewards:
No matter which operators win, no matter which device or component manufacturers win, no matter which wireless application developers win, the air interface (g) (how devices communicate with each other) has already been mostly determined for the remainder of this decade. Firms whose patented technology has been included as "essential" in the standards are already identified. Those "IPR think tanks" that can collect the royalties for what they've already contributed to the standards may well be the cash cows of this decade. See the special reports "Understanding IPR" and "Understanding the Standards-Setting Process".

WirelessLedger.com believes that over the coming five years, the most money will be made by investors in firms focusing on this 5th category: air interface (g) development. You won't be able to see this "product" of their labor. Nor can you touch it or smell it. But it's that the very heart of each and every wireless communications system and device, whether that be a cell phone, PDA, wireless laptop or other. It is in this category that WirelessLedger.com believes it has found the most undervalued wireless communications firm. The Company is 30 years old. It has about $300 million in the bank and no debt. It has licensed industry giants like Nokia, QUALCOMM, LG, Ericsson, Sony-Ericsson, Sharp, NEC, and others. It has worked in partnership with the industry leader Nokia as well as Philips, Infineon Technologies (a major chip producer worldwide) and others. This company has more than 4000 patents worldwide in air interface technology. Knowledgeable observers believe very few other firms have more of their patented technology included in next generation (3G) specifications or standards than InterDigital. Read about it. InterDigital Report

Read what every wireless investor should know about how international compatibility standards are determined and which companies contributing patented technology to the standards have the most potential for making money in the short and long term.

Read the Introduction to wireless communications, written especially for non-techies who want to get on board with the technology driving wireless communications.

Read the Internet's most comprehensive report on IPR think tank InterDigital Communications Corp. (NASDAQ:IDCC) Focus Stock Report

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