NextWave Wireless: The Wall Street Analyst Forum Presentation Transcript

NextWave Wireless, Inc. (WAVE)

The Wall Street Analyst Forum

November 28, 2007 2:40 pm ET

Executive

Roy Berger - EVP, Marketing and Communications.

Presentation

Moderator

Okay our next company this afternoon is NextWave Wireless Incorporated. NextWave Wireless Incorporated is a global provider of mobile broadband products and technologies to enable Wireless 2.0, the next generation of mobile communications. The company's portfolio of innovative products includes semiconductors to power fourth generation mobile broadband devices, leading edge mobile broadband network products, and a breakthrough 4G mobile technology optimized for UMTS operators around the world.

In addition, NextWave Wireless is the world's leading supplier of device embedded software that transforms a mobile handset into a fully featured multimedia device that provides people the ability to screen, download and play video and music, receive live TV broadcast and engage in two-way video telephony. Today, over 160 million handsets powered by NextWave software have been shipped by many of the largest wireless operators in the world.

And presenting this afternoon is Roy Berger, the Executive Vice President of Marketing and Communications.

Roy Berger

Thank you. Well thanks to we praise you for taking the time to --

Unidentified Company Representative

There is a huge crowd on the web, so don't just play to us and remember that you are being recorded.

Roy Berger

Right. Okay, actually I’m really happy to have the opportunity to share the NextWave story. We'll walk through analyst forum today. I'll let you understand that this is going to webcast. We think we have a very exciting story to tell. It's hopefully, will be able to provide you with a lot of good information and you would learn about what our company is up to. There is the obligatory forward-looking statements that we need to read. Okay, I think we're done with that.

Okay. To put it to words, a little bit more succinctly then how the introduction was we are a mobile multimedia technology company. What we do is develop semiconductor solutions, software solutions and wireless network infrastructure solutions that enable next-generation mobile multimedia application, such as like mobile TV. The important thing is that, this is a market that is on a verge of explosive global growth and we'll talk about that a little more in a moment.

Before I get into the details of the products and services that we offer, let me stop for a minute and review a couple of key facts. We were formed in April 2005. We were listed on NASDAQ in January of this year. Our aggregate funding reached $1.2 billion. Today we have over 1000 employees located in approximately 35 locations around the world, plus 29 there we've opened up some recently.

And I'd also like to take a moment to talk about our third quarter financial results, which we announced on November 14th. We are excited that the $17.8 million of revenue in the third quarter represents triple-digit growth from the same period last year, actually 166% revenue growth. We are excited about that top-line growth. Most of that growth came out of two of our operating subsidiaries. One of them is PacketVideo which we'll talk about in a moment.

PacketVideo is the leading independent supplier of software for mobile phones in the world. And IPWireless, which is a company that we acquired earlier this year, which provides fourth generation mobile broadband and mobile multimedia network products for carriers worldwide.

Our third quarter operating loss of $91.7 million needs to be put in to context and that 40% of that loss was attributed to acquisitions of IPWireless and PacketVideo and 33% of that loss was attributed to non-cash items, amortizations, non-cash compensation expenses, in-process R&D again associated with some of those acquisition.

We also in our earnings announcement, touch down some key operation milestone that we reached in the third quarter. First of which was the release of our NW1100 WiMAX chipset. That's our first WiMAX chipset, it's comprised of a baseband system-on-chip and a multi-band RFIC that matcjed our baseband chip.

In the announcement, we made clear that there is a second family of chips coming out which are the NW2000 chips in 2008. We also established NextWave Wireless Latin America and Argentina.

And finally, we acquired some additional spectrum assets in Europe, specifically in Austria, Slovakia and Croatia in the 3.5 gigahertz band. And in each one of those markets, the spectrum assets are approximately 40 megahertz to 60 megahertz of spectrum, so it's quite a bit spectrum that we have acquired in those three markets.

Couple of important milestones that we reached, just recently in the fourth quarter was that PacketVideo was invited to become a founding member of the Open Handset Alliance, which is created by 30 other industry leaders including Google, this was the high profile announcement that was made just several weeks ago and we feel very proud that PacketVideo is going to be providing the for this multimedia software sub-system to what's called the Android platform. That's the open platform that is going to be provided by the Open Handset Alliance, in fact the SDK where the software development kit was recently opened up.

And second, IPWireless hit an important milestone by shipping its 600th base station to T-mobile for deployment in their T-mobile sports generation Czechoslovakia network. I am going to talk about at little bit more because that's a very exciting fourth generation network that's operating on top of our IPWireless technology.

As I mentioned before, we are focused on developing the enabling technologies to make mobile and multimedia a reality or what I call mobile media, it’s a bit easier on the tongue. And we are very excited about that because we think we are in exactly the right place at the right time, because the entire global wireless industry is undergoing a fundamental shift and it's a very big industry, $0.5 trillion and it's shifting from this, which is an industry that's largely based on the delivery of narrowband voice and narrowband data to relatively simple devices to this. And this is a world where --

Unidentified Audience Member

Is that's commonly referred to as 4G.

Roy Berger

Well 4G actually is a term that's used in a lot of different context, there is the technical definition of 4G from [CTINTU] and there is a lot of other ways that people tend to use 4G. We don't necessarily talk about this as 4G, but we talk about this within our company as Wireless 2.0. Wireless 1.0 for the last 20 years where the wireless industry experienced explosive growth, but largely around voice and narrowband data. Wireless 2.0 to us represents as new era where one will actually have the full library of multimedia content in the palm of their hand, anywhere, anytime.

One of the key enablers to making this happen is 4G. The 4G network infrastructure, the 4G wireless technologies is a key enabler to make this happen. But, there is a lot of other ecosystem components will have to come together. A bottom beyond 4G, and we will talk about that in a minute.

So, what we're describing here is putting virtually any kind of multimedia content into the palm of your hand. That's television, that's streaming video, it's not only taking video off the network, but it's also putting video on the network. If you've got a video camera on your phone, being able to capture video of your son's birthday party and streaming it up to the network on a real time basis. For us the real killer out is video, in this new era. And video comes in a lot of different shapes and sizes.

As I mentioned before, it could be streaming video, it could be broadcast TV, it could be unicast TV. In a lot of different ways that video can be downloaded to a phone. But, they all fall under this umbrella term of video. The challenges that we have today is that the third generation networks, that have been widely deployed in the United States and virtually everywhere else, simply don't have the horsepower to handle this kinds of massive data.

We put into context word, the average user in the United States, uses their phone to the tune of about 600 to 800 minutes a month. If you translate that voice usage into different bytes, that roughly equals 70 to 100 megabytes of data. When we are talking about streaming video is something that a user can generate on the network in minutes. So what we have to do is develop new ways, and new technologies to handle what is going to be a just an astronomical increase in network traffic that these kinds of bandwidth intensive multimedia applications are going to generate.

So what's it going to take? It will take to what you just said a moment ago the development of new forth-generation wireless technologies. Technologies that are specifically designed for the ground up, not to handle narrowband voice or narrowband data applications but desire to handle massive amounts of network traffic and cost efficiently.

Second, advanced content management systems are going to be required. What we really need is to take the content ecosystem that exists in broadcast or in the way that movies are distributed on DVD or the way that radio content is distributed and that has to be transported into a mobile environment. That's going to require a very different kind of content management system and that's what we are working on quite diligently through our PacketVideo subsidiary.

And third, new spectrum utilization techniques are going to be needed. Spectrum is and will always be a scarce resource. There has been great strides made in being able to squeeze more data out of the same amount of spectrum and that technology improvement will continue to happen. But it really needs to happen in a big way in terms of being able to support the evolution from narrowband data to broadband data and wireless.

We have four major operating companies. Our Mobile Products Group is comprised of NextWave Semiconductors and our PacketVideo subsidiary is focused on mobile multimedia software and solutions. And our Network Solutions Group is comprised of IPWireless, which manufactures and develops advanced network infrastructure solutions.

And GO Networks, which we acquired this year and GO has developed a innovative wide area carrier-class Wi-Fi network technology that's specifically designed for deployments by municipalities and service carriers.

You could also see on the map that we've got most of the locations internationally mapped out here, but the point is we are a global company and the reason we have locations scattered around the globe, is that we want to put our people close to the customers that we are working with and we have customers virtually everywhere.

We've also accumulated 370 million POPs of licensed spectrum around the world. As you can see we have a very significant license hopefully in the United States, almost 250 million people covered in US, another 14.5 million up in Canada. And we've got licenses in five markets around Europe. And the reason that we acquired our spectrum was not to become a carrier or service operator that's not our goal, that's not our mission and that's not our business.

However, we do believe that being able to provide service providers interested in deploying next-generation networks that, by using our technology with a spectrum they need, will help accelerate adoption of our products and technology.

One of the financial metrics we often get measured on is the price we pay for the spectrum assets that we've acquired. Putting it in terms of megahertz, POPs we have 9.7 billion megahertz POPs. We have 9.7 billion megahertz POPs in our portfolio today, at an average cost of $0.504 per megahertz POP. And it's interesting to compare that against some of the prices paid, and some of the recent FCC actions referring to the AWS auction which occurred back in 2006, where the price per cricketers plus ten times this. So we have been very-very careful to find the best custom opportunities in U.S., anything globally and feel good about the prices that we've paid for our careful to find the best special market opportunities in US, anything global and we feel good about the prices that we paid for international special portfolio.

Little bit more information about our specific company's PacketVideo. As I have mentioned before, it is the largest independent provider of device-embedded multimedia software. They are based in San Diego. They have offices not only in the U.S., but in Europe and Asia. They have closed to 240 employees today. And their customers include the largest network operators, service providers in the world, Vodafone, Verizon, T-Mobile, Rogers up in Canada. And they are focused on delivering solutions in a couple of different categories.

The first category is the multimedia sub-system that goes inside of smartphones and virtually, every major OEM or manufacturer of a smartphone in the world has PacketVideo software in it. What that software does, it allows the phone to act as a multimedia phone. It allows the phone to download videos, download music; it allows the user to manage that content. We'll talk about a little bit more about how that works. They have also focused on developing media conversion solutions based on the DLNA standards. And these are solutions that allow, would allow somebody to migrate content from their mobile device to the consumer electronics platform that sits in your house. In other words, if they captured a video on their mobile device while they were outside and they want to watch that video at home, they simply can get that mobile device through DLNA will be able to share the content with their HDTV or their Stereo at home. So such a lead converges these two ecosystems together in a very simplest and easy way to the end user to manage.

They are also the leader in DRM in the software industry, and I'll talk about that in a moment, because it's a very-very important element for the ecosystem because cotton owners or cotton aggregators want to make sure that their content is protected when it moves into a wireless environment and they are the largest provider of DRM solutions and wireless today.

And finally, they have a developed their media fusion engine. Media fusion is a platform that we believe carriers will begin deploying next year. And what media fusion does is, it injects content from any number of sources that are out there and virtually any kind of content, and then provides that content up to the device, specifically the package that your clients offer in a way that uses the common user interface.

And one of the problems today is when people utilize their mobile device to get content off the internet, the way it's presented the device is very-very different. The user interface can be completely different. And the idea here is to make it simple as possible for end users, that if they want to find content on the internet that's fine, they have a freedom to do that, but when the vendors on their device, it should be vended in a way, that's far easy for them to manage.

Verizon V Cast is a perfect example of major carriers that use as PacketVideo software. and to date, over a 160 million handset around the world are now being powered by PacketVideo software, not counting -- this is actually does not count a very large number of handsets that use PacketVideo's DRM software. And as I mentioned before all top ten handsets OEMs around the world, our PacketVideo customers.

Getting back to DRM for a moment. Today Vodafone and T-mobile in Europe among other carries currently utilized PacketVideo's DRM solution, which was acquired by a company called STC, which is developed by a company called HTC rather than which was acquired by PackerVideo. And it has two very unique capabilities, which is one of the reasons why they have been so successful in getting carrier interest around the solution. One is that their solution can actually track user content or track the user's usage of various types of content, which can become a very valuable point of information for the carries. If they know specifically what kind of content, everyone of their user is looking at.

And second, their software can actually manage the subscriptions. A very often, content is subscription limited. A content only will say, I only want this content using a very -- within very strict parameters. And so the DRM solution must be able to have the flexibility to chip parameters and so DRM solution must be able to have the flexibility to ensure that the content owner usagewides are being restricted.

And I mentioned a moment ago, their media fusion platform, little bit of an eye chart, the visual representation of how it works, essentially ingest content and then helps the carrier manage their content very carefully, but equally is important, it provides a carrier with exceptionally important capability. And that is to target personalize ads to end-users based on their content preferences Into certain senses the holy grail that advertisers have been chasing for quite sometime, but now with the media fusion platform the operators will in fact have all the necessary data and data mining capabilities in order to do this.

At the same time, the targeted data would not only be based on user's usage preferences, but also on their location which is a whole other dimension of value that can be added to the advertising equation.

IPWireless, which we acquired earlier this year, is based on San Bruno, California, their major development centers in Chippenham, UK and have another development center in Denmark. We currently have about a 180 employees and they deliver end-to-end or turnkey mobile broadband solutions, including based stations, including subscriber devices and including semiconductor based on UMTS standard. There are three major markets that they target: one is mobile broadband systems where their networks have been deployed in over a dozen countries around the world. Second is: mobile TV solutions and third is: public-safety.

With respect to public-safety, IPWireless technology has been selected by the city of New York to power its new public-safety mobile network, which is currently being deployed to date. The contract for this network was awarded to Northrop Grumman who partnered with IPWireless, and that network is in the process of being deployed. In fact, we are on air now in lower Manhattan and when this network is complete it will be the largest public-safety wireless network in the world.

The good example of the mobile broadband market that IPWireless has been very successful in targeting is what's occurring in the Czech Republic. T-Mobile has built what we think is the largest fourth generation mobile broadband network in the world. It covers 60% of the population there and it's experiencing extremely rapid subscriber growth. As I mentioned before, IPWireless recently announced that it shipped 600 base stations to T-Mobile for deployment in this network.

What's very, very interesting is: it's provided us great insight into how users will take advantage of a next generation mobile broadband network. I think, I mentioned to you before, the average use in United States based on their voice usage generates something of the order of 70 to 100 Megabytes of traffic under network. The average user on this network in Czechoslovakia is putting several gigabytes of traffic on the network every month. So, we are talking about several orders of magnitude increase in network traffic. Again it's proven the point that if you give people the opportunity to access the rich library of multimedia content that they want on a fully mobile basis, they will take advantage of it and they will generate the traffic on the network.

TDtv is another very exciting product that IPWireless has developed. Basically what TDtv is, it allows the carrier to utilize underutilized spectrum to broadcast multiple channels of high resolution television to a mobile device. What IPWireless did was they took advantage of the fact that there is a significant amount of underutilized TDtv spectrum in Europe and developed a technology that would allow the Pan European carriers to own the spectrum, to deliver an exceptionally powerful mobile TV experience to end users. And, because of their technology, their TDtv technology is UMTS compatible with the networks that have already been deployed in Europe.

From a European carrier standpoint, this is a very, very easy implementation for them. And from their perspective, it's a very cost effective implementation because they don't have to go out and get new spectrum, and it's very easy to integrate TDtv into the existing UMTS family of handsets that are already being marketed in Europe.

TDtv is also a great example of how our various operating companies can work together. For example, while IPWireless will be providing the network infrastructure around TDtv or to enable TDtv, and while they will be providing the semiconductors and potentially some of the handsets to receive TDtv broadcast, PackageVideo will be working with the carriers on the network side and specifically their video feature platform, to help provide the carriers with the content they needs to distribute over TDtv, and PacketVideo software, the client software will exist on the device side. So, again this is a great illustration of how the various operating units of NextWave are working very, very closely together to deliver end-to-end solutions to major customers such as [YouTube].

Finally, IPWireless is developing products that we like to think of as future proofing for our customers. Right now, the products or historically the products have been based UMTS TD-CDMA standard, but we all recognize that WiMAX and LTE as a rapidly evolving global standards that one needs to be able to provide our service provider or network operator customers an opportunity to evolve their network equipment as those standards evolve and so the IPW V5 base station will support not only UMTS, but also their mobile TV and also WiMAX and also LTE.

The GO Networks company that we also acquired this year, they developed next-generation mobile Wi-Fi solutions, specifically designed for wide area deployments by municipalities and service operators. The key to the GO Networks solution is a proprietary adaptive beamforming technology called xRF and because of that that adaptive beamforming capability and the fact that they use a very innovative mesh technology, the average GO Networks deployments in terms of base station counts would be somewhere within the order one third to one half lower than what one would be using more conventional Wi-Fi infrastructure.

And fourth is our Semiconductor Technology Company and you'll note that it does not say WiMAX semiconductors, it says OFDM semiconductors because that's how we think of our semiconductor business. To the question asked a little bit earlier, 4G in many respects equals OFDM as a technology. And so we are not focused just on WiMAX, we're focused on the overall OFDM or 4G evolution pack when it comes to our semiconductor development activities.

The semiconductor team is based in San Diego. We have technology centers around the world, over 450 employees working on our semiconductors today. And the important thing is that the people who are leading this effort have done it before. Many of those folks who comprised the core team at Qualcomm, who developed Qualcomm's CDMA chip have now joined us and are working on our semiconductor development activities. In fact Dr. Andrew Viterbi, who is one of the founders of Qualcomm is now our Technology Adviser Council, which is helping this team move their semiconductor technology innovations forward.

As I mentioned before, our first commercial chipset was announced earlier this year, we expect to have our next-generation chipset shipping next year and with respect to WiMAX, our view is WiMAX is a very, very powerful standard that is rapidly gaining growing acceptance around the world.

The things that we are doing are to provide a lot innovation on top of WiMAX to make it even more compelling technology for the industry. For example, we are integrating WiMAX and Wi-Fi at the chip level which is very important because we recognize that.

There is an awful lot of lifeline even it's out there today. And therefore WiMAX networks get deployed it would be to the end users benefit to be able to slip on to the Wi-Fi network when they no longer have connectivity through the WiMAX network.

But, very important is, we are building an enhanced set of broadcast capabilities. As I mentioned before, to us broadcast is -- the broadcaster's video or television in our opinion is a crucial element that people go and want to have the capabilities of having --. And there is a number of other major advancements and innovations that we are working on to create differentiation on the WiMAX chips, power consumption for example is a very, very big issue. And so it's not just a matter of shrinking the geometry of the chip to 60 nanometer or 45 nanometer but it's also a matter of really thinking through the overall architecture of the chip to drive as much power, the power consumption is low as possible.

Unidentified Audience Member

How much power consumption are you taking out of the chip design?

Roy Berger

That's a very good question. I think it's going to vary significantly based on the series of the chips that we announced probably throughout 2008. And, as we've already said, we are looking to constantly shrink up the geometry of the chip. Work on the Power Amplifier on the front end of the chip and find innovative ways of architecting and design of the chip to squeeze as much power consumption out of the chip as possible.

Unidentified Audience Member

[Question Inaudible]

Roy Berger

I think Intel has a slightly different perspective. They are more focused on WiMAX chips that would be integrated into notebook or laptop type of devices. And those platforms, because of the fact that they have got such large batteries, are much less sensitive to the power consumption of say WiMAX chipset. Than saying: the power consumption in the device like a mobile phone, which, obviously, has a much smaller battery. So, I think we are coming at it from the approach that the devices that we want to have or WiMAX chips populated into are going to any small profile devices with small batteries, therefore, power consumption is going to become absolutely a critical factor. As opposed to WiMAX chips that will be embedded into notebooks and laptops. I also want to point out that the bottom of this slide which says marching towards LTE. LTE is another OCM based technology and we are working very hard towards developing LTE semiconductor solutions as well. And we think that we have got a very unique position with respect to LTE. First of all, you can kind of think of LTE as WiMAX, in a 3GPP wrapper. There are lot of similarities between LTE and WiMAX, they are both (inaudible), they are both IP based.

Some people actually make the argument that WiMAX and certainly guards is pre- LTE. We are one of the innovations that were going to be providing to customers, who purchased our WiMAX chips, our chips will operate both in FDD mode and TDD mode, and in many respects, which is actually quite unique. WiMAX and FDD mode is very, very similar to in many respects that help LTE operates. So from a WiMAX perspective and all the work and experience that we have in developing WiMAX semiconductors, we think we are ideally positioned to develop a LTE semiconductor solution. But equally important IPWireless who is the leader in TD-CDMA technology, the PHY layer the MAC layer in TD-CDMA is virtually identical to the PHY/MAC layer it's on LTE.

So between our WiMAX semiconductor development activities and the semiconductor activities at IPWireless subsidiary, we think we actually have a lot of background, a lot of experience, a lot of know how, that's very unique that will lead us to success with the respect to LTE.

Unidentified Audience Member

So what does LTE stand for?

Roy Berger

Long Term Evolution.

Unidentified Audience Member

Thank you.

Roy Berger

This is a road map that we announced earlier this year of our WiMAX ships its family, as I mentioned before at the end of the year, 1000 family is currently shipping for preproduction and over 2000 family will be shipping next year.

And finally, we have build a testing facility in Henderson, Nevada right outside of Las Vegas, which is a fully functional test network that supports TD-CDMA, will support WiMAX and Wi-Fi. And the purpose of this is to provide customers the ability to come in, see our technologies: how they perform in the field. Equally important to provide customers who have platforms of their own that wouldn't be integrated into our network equipment and technologies and opportunity to do that.

So in the end, we would like to tell people that we offer for the five SS Semiconductor, Systems, Software, Spectrum, and Services, and together we can deliver what we think as a very innovative and cutting edge, end-to-end solutions to network operators, to device manufacturers and to consumer electronics company, so interested in embracing this Wireless 2.0.

Unidentified Audience Member

[Question Inaudible]

Roy Berger

Okay.

Unidentified Audience Member

[Question Inaudible]

Roy Berger

At present we don't do segment reporting. I am not sure what the timing is, in terms of us moving towards segment reporting, so at this moment we don't breakout revenues by our subsidiary.

Unidentified Audience Member

Okay, can you talk in verbiage? What's most important now? What you expect to be most important in the few years?

Roy Berger

Well clearly the majority of our revenues to date have been generated by our PacketVideo subsidiary in IPWireless subsidiary. And both of them are experiencing excellent growth, there all going to be announcing what we think are some very exciting products in platform next year.

So it would be reasonable to think that those companies are going to continue to represent a sizable portion of our revenue at least moving in to 2008. Subsequent to that as our second generation semiconductor chipsets become commercial and scale up in volume we would expect to see significant amount of some revenues coming out of our semiconductor business.

Unidentified Audience Member

And how do you end up in Argentina?

Roy Berger

As I mentioned to you before, we are very opportunistic in looking at what we think are good spectrum assets that are available. The spectrum in Argentina led our criteria for spectrum that we think would be attractive to carrier partners who would want to deploy our networks. We think the price was right, it’s the right kind of spectrum and so that's why we recently acquired the spectrum in Argentina.

Unidentified Audience Member

So: what's wrong with Brazil or is it? What's your perspective of Brazil?

Roy Berger

I don't think there is anything wrong with Brazil. I don't think our, I don't think there is any you should read into anything about our Argentina acquisition other than the spectrum is available in Argentina.

Unidentified Audience Member

Okay thank you. Are you [there]?

Roy Berger

Well, no, our Latin America operation is headquartered in (Inaudible)

Unidentified Audience Member

[Question Inaudible]

Roy Berger

We actually see South America as an excellent market, which is all the countries in South America, we think are prime for the deployment of the fourth generation mobile technology that we are developing.

Unidentified Audience Member

So do you license any technology from Qualcomm?

Roy Berger

Not at the moment.

Unidentified Audience Member

In terms of where you're heading going out, are you viewing yourself that as another forgetting the negatives another Lucent or Nortel type of company being a major producer for the equipment?

Roy Berger

I think we're focusing our lens into the -- what I would call the mobile multimedia landscape. To the extent that requires us to deliver network infrastructure equipment to carriers, obviously, we that today through IP Wireless. And we deliver the software through PacketVideo and we're developing the semiconductors. I think the -- we are not focused exclusively on manufacturing our own equipment, with respect to the infrastructure business I think we have made it very clear from the start that we're always open to entering into partnerships or licensing arrangements with the larger infrastructure manufactures around the world who at times have excellent resources to deliver large scale network deployments to customers.

Unidentified Audience Member

So, speaking of those guys hanging out in Korea: where do you stand with Samsung and KT and those guys over there, generally?

Roy Berger

I think Korea is a good example of a country where we think we're making pretty good progress in developing the kind of partnerships we need to start delivering products into that market.

Unidentified Audience Member

Have they got networks and technology that are competitive with you or complementary to you?

Roy Berger

Well, in this business, everybody very often is both. Alright, so we tend to look at these business partnership opportunities from the perspective of real partnership with one of these companies, support the strategy that we are on in terms of expanding the scope and breadth of our product portfolio and our customers. So some of them very often do in fact have product and services that may be competitive, but that's okay. We feel very confident in our products and it's not unusual to partner with companies who have alternatives that they may offer, but we will find them.

Unidentified Audience Member

[Question Inaudible]

Roy Berger

That included all, the entire portfolio of U.S., domestic and international, yeah.

Unidentified Audience Member

Will you say for U.S?

Roy Berger

I don't know the number off hand, I think actually you could probably pull it out of our CC filings, we think it's in there.

Unidentified Audience Member

Well, LTE sounds more of kind of a longer-term strategy or what does LTE briefly gained at WiMAX which is so (inaudible)?

Roy Berger

Yeah. You have to kind of think of it in terms of the standards body. You have the IEEE, which was the standard body that developed WiMAX, okay. You have these 3GPP standards body, which has essentially developed the whole GSM tree all the way through WCDMA and HSDPA. LTE is a 3GPP standard, so it's the next evolutionary leap for all the carriers who are following the 3GPP standard.

Unidentified Audience Member

[Question Inaudible]

Roy Berger

It's higher capacity, all of the improvements that one would expect to see as a new standard is evolved -- higher capacity, better quality of service capabilities…

Unidentified Audience Member

And then you say: when you expect to make profit?

Roy Berger

No, I did not say that.

Unidentified Audience Member

[Question Inaudible]

Roy Berger

No, at this time, we do not provide any kind of forward guidance.

Unidentified Audience Member

I am trying to understand, obviously, I see the relationship between the four businesses. But, I don't understand: the guiding for loss of the underneath what your core is? What you are trying to be? And, I guess, the thing that I am finding disturbing that the profit of word is normally start up companies go after a single market and here, after at least four or five different markets, which usually is not a good sign. So I am trying to understand: the core philosophy of where you are heading? Trying to be everything to everybody that's connected with wireless or what ties it together?

Unidentified Audience Member

But I am excited just to give you that handful.

Roy Berger

Okay. Good, we are excited too, I think the, we don't see ourselves going after multiple markets, we certainly don't see ourselves trying to go after the entire wireless broadband market, that's an enormous market that encompasses a landscape that's far greater than what we are -- that we are looking at.

As I try to emphasize our vision is in the area of mobile multimedia and they are very specific technologies that have to be developed in order to enable mobile multimedia. They are specific capabilities that have to be developed to turn a regular phone like this in to a full feature mobile appliance that you can watch TV on, watch movies on, stream it down like virtually any kind of multimedia content.

So, what was our guiding principle when we started the company? What we realized was the nature of the customers itself we are talking to was that you're much better off if you could solve the key, enabling problems were then turnkey basis, then if you were just given them one small piece of the solution.

So when we're talking about next generation mobile multimedia, we needed to develop the semiconductors to kind of drive the devices and networks to support these kinds of applications. We needed to develop a software, because the software at the device level and at the network are crucial to be able to support mobile multimedia. And we needed to have the ability at times to actually give them the actual network equipment for them to deploy.

So from our perspective we see ourselves being very tightly focused on a particular area in the wireless broadband space, and we actually think it's the hottest area in the wireless broadband space which is mobile multimedia. That's where in our opinion the real action is going to be over the next -- for quite some time. For everything we are doing, whether it's in semiconductors or software or base stations, everything we are doing is tightly focused against that strategy of delivering a mobile multimedia solution to the industry.

Unidentified Audience Member

[Question Inaudible]

Roy Berger

No, no. There was never any relationship, yeah.

Unidentified Audience Member

[Question Inaudible]

Roy Berger

The regional funding for NextWave came out of, we really spin-off from a predecessor company called NextWave Telecom.

Unidentified Audience Member

[Question Inaudible]

Roy Berger

Yeah, and there wasn't any…

Unidentified Audience Member

[Question Inaudible]

Roy Berger

Well Allen was one of the founders of Qualcomm. He brings an awful lot of visioning capabilities obviously to the company, because of his experience. Any other?

Unidentified Audience Member

[Question Inaudible]

Roy Berger

Yeah, interesting, it's a very good question. Media flow is a Qualcomm technology that was developed to broadcast multiple channels of TV content. It's been adopted by Verizon and others. The thing that we are excited about in terms of our implementation of mobile-TV is that it's all done on a single chip and we think that's very-very important. If you -- our view is that media flow in other alternative technologies actually require a two chip solution in the device that has cost of the device, that reduces power construction to the device. We are actually integrating the mobile-TV capabilities right into the chip itself and we think that's going to be a real distinctive edge.

Unidentified Audience Member

[Question Inaudible]

Roy Berger

A typical handset has a lot of different chips performing lots of different functions, but when it comes to the real heart of the handset there is a baseband chip and there is orifice chip which really performs the heavy lifting and those are the chips that were actively engaged in developing and are currently shipping through our [MBW 1000 series]?

Unidentified Audience Member

[Question Inaudible]

Roy Berger

That's right. Yeah. Our goal is that when our major handset manufacturer or manufactured any kind of WiMAX or in the future LTE enabled platform designs a new product for sale that they would source their semiconductors from NextWave.

Unidentified Audience Member

[Question Inaudible]

Roy Berger

Well, WiMAX is an open standard.

Unidentified Audience Member

Okay.

Roy Berger

Alright. So, we clearly said WiMAX will become one of the major G standards globally. We think others will follow soon. Our goal is to become one of the major suppliers of semiconductor solutions for device manufactures looking to market WiMAX devices.

Unidentified Audience Member

[Question Inaudible]

Roy Berger

Right now I don't -- I think we are prepared to really get into details in terms of who we are collaborating with, but we are certainly having lots of discussions with the lot of people.

Unidentified Audience Member

[Question Inaudible]

Roy Berger

Well, I think, what you are referring to was PacketVideo.

Unidentified Audience Member

Right.

Roy Berger

Right, and PacketVideo to supplies not semiconductors they are on the software side and they could well have a business relationship with Nokia.

Unidentified Audience Member

And so that doesn't Nokia have a broadcast standard I don’t know what they call it, you guys --.

Roy Berger

DVB-H

Unidentified Audience Member

Yeah, good and is that somewhat competitive with what your solutions here or not?

Roy Berger

Yes and no. Actually our broadcast technology on WiMAX, we think is actually going to be somewhat compatible with DVB-H, but again DVB-H, VDFO are alternative ways of delivering mobile TV to a subscriber device. We think we are very, very well positioned with respect to our TDtv technology. It's been trialed by the largest Pan European carriers in Europe, in the UK and the feedback was extremely positive. So we think TDtv is for a number of reasons, especially in the Pan European market is the optimal mobile TV solution.

Unidentified Audience Member

[Question Inaudible]

Roy Berger

Yeah, right. That's one of their product is the --

Unidentified Audience Member

Will that be compatible with these other products that are out there or delivered --

Roy Berger

Yeah, actually PacketVideo by nature of their extensive base of customers is in a sense standard agnostic, their clients will sit on the CDMA phone or sit on the GSM phone or UMTS phone.

Unidentified Audience Member

Does PacketVideo intend to expand their chip. PacketVideo is --?

Roy Berger

Software. PacketVideo is software.

Unidentified Audience Member

Software, okay. And they run on what chips?

Roy Berger

They really run on virtually every kind of mobile device that's being shipped. As I mentioned before, being a sense from the device of standpoint of technology agnostic, it's a piece of client software that could run on lots of different devices and that's one of the reasons that's been so successful because they specifically in markets like the software to be as flexible as possible for all the different carriers.

Unidentified Audience Member

So are you talking to people like CNN and ESPN and these kind of folks about getting their programming on your devices?

Roy Berger

Remember they are not our devices and this is not our network.

Unidentified Audience Member

[Question Inaudible]

Roy Berger

Alright.

Unidentified Audience Member

But, is there anything going with the content Hollywood community to get them involved in this?

Roy Berger

I think the attraction to the content owners and the content aggregators of being able to move their content on to essentially a billion small screens around the world.

Unidentified Audience Member

Would be somewhat attractive!

[Multiple Speakers]

Roy Berger

It's very compelling, right. So, you were seeing that already today. But as I mentioned at the beginning of the presentation, what's required is the kind of technologies that we are developing and commercializing. So, that content actually can be delivered in a very cost effective and in a very user friendly way. Okay.

Unidentified Audience Member

So is it late '08 we are talking about?

Roy Berger

Well, some of our products, obviously, PacketVideo and IPWireless are shipping in volume today. That's what's driving our triple-digit revenue growth in the third quarter. A lot of the advancements are going to take place at the semiconductor level in '08 based on our next generation of semiconductors. And we are very excited about TDtv. So we would ask the people stay tuned for next year.

Unidentified Audience Member

So, we can get some feeling of the growth of the company, obviously I am new to this story. You did almost [18 million] in the road only in third quarter. What was the first and second quarter like?

Roy Berger

First and second quarter.

Unidentified Audience Member

Roughly speaking --.

[Multiple Speakers]

Roy Berger

We could actually, instead of us giving you a wrong number why don't we get you the exact numbers.

Unidentified Audience Member

I would look at that from the internet too.

Unidentified Audience Member

I will write the press release.

Unidentified Company Representative

No we can get it.

Roy Berger

We can get it.

Unidentified Company Representative

I will give you my card and --

Unidentified Audience Member

First mine, thank you.

Roy Berger

Okay, very good, thank you very much.

Unidentified Audience Member

Thank you.

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