TechOnline published a very detailed teardown analysis of the 3G iPhone that can be accessed here. Their analysis went a step beyond iFixit's disassembly as they scrutinized 'under the hood' of the various iPhone components to identify them more accurately. Their extraordinary effort also lets me review my iPhone predictions that were summarized in my June 2008 post here.

Here is the photo of the iPhone 3G chipset as dissected by TechOnline:

The staff attorney assigned to the InterDigital-Samsung ITC dispute favored Samsung [KSX: 5930] in his report. His position was that there is no violation calls for rejecting InterDigital's (IDCC) proposal to ban disputed Samsung products in the US. InterDigital's stock took a 25% dip, as the Street is now pessimistic about its prospects. As the drama unfolds, here is an attempt to even out public perception. Before you read on, however, please note that I am neither a legal expert nor a Wall Street analyst. So, take it for what it is, just an opinion.

First, while the staff report is an unbiased third-party opinion on the case, it is still only one instrument for the Administrative Law Judge [ALJ] to decide. The judge is yet to hear both companies' positions. The staff report is not binding on the judge. There is precedence in the past where the ALJ has acted against the staff recommendation. Therefore, while InterDigital has lost some positioning in this case now, the staff recommendation is certainly not the end of the road for this ITC dispute.

If there is an award for bad blog-post timing, then I will perhaps be a front-runner this month! On Monday, I posted an article about Nokia (NOK) and IDCC settling their U.K. disputes, where I mentioned that it was a sign of more good news to come. On Tuesday, InterDigital (IDCC) announced that the International Trade Commission [ITC] staff in the Samsung [KSX: 5930] case has favored Samsung. This has let to an astronomical 25% drop in IDCC's share price as people scampered to let go of their shares in anticipation of more bad news.

This is not a great development for IDCC. The downside is that if the ALJ upholds the staff's recommendation, then IDCC will lose any right to collect royalties from Samsung in the U.S. This will also likely percolate to its ITC case against Nokia creating a domino effect. This being said, the dispute still has a long way to go. Both parties are yet to make their respective cases.

InterDigital, the King of Prussia-based wireless company, saw its shares jump by about 5% last week when the S&P and NASDAQ were down by around 2%. The reason for this optimism was the news that InterDigital (IDCC) and Nokia (NOK) have agreed to end two legal proceedings in the U.K.

In July 2005, Nokia asked a London High Court declare InterDigital's intellectual property as non-essential to UMTS (3G standard encompassing WCDMA and HSDPA). InterDigital, in turn, filed a suit against Nokia in December 2006. The companies recently decided to drop these lawsuits. The terms of the agreement are unknown. Besides, the companies continue to be at loggerheads in front of the ITC in the U.S. While this settlement does not reflect a sudden friendliness or alliance between the two warring companies, it is certainly a good sign for both parties.

The 3G iPhone is here - well, almost here! Steve Jobs announced the latest avatar of the iPhone in his WWDC keynote on Monday. Unfortunately for the users and technology enthusiasts, the phone will not be out until July 11. In any case, let us quickly look at the tidbits thrown at us during his talk.

The 8GB 3G iPhone will indeed come with the $199 price tag. Other models are also lower cost than before. This is perhaps an industry changing move by Apple (AAPL)  which has sought to bring smartphones to the mass market. It has, in the process, also shed the exclusivity tag that accompanies most of its products. The $199 tag is likely below the phone's manufacturing cost. So, it looks like AT&T (T) is subsidizing it for us. Besides, I am sure that Apple will make money through the plethora of applications that are lined up for the iPhone apart from the AT&T service contract itself. Essentially, there seems to be a change in its iPhone business model. Apple, while choosing volume over margin with this move, will have to be cautious not to repeat Motorola's (MOT) mistakes with the highly successful, yet unprofitable, Razr line of phones.

The 3G iPhone will be GPS-enabled. This clearly puts gadgets like Garmin's (GRMN) Nuvifone at a disadvantage. The phone also boasts good battery life. It has five hours of 3G talk-time, 5 to 6 hours of data browsing, 7 hours of video, and 24 hours of audio. Not to mention the highly anticipated enterprise support that will have Research In Motion (RIMM) gritting its teeth.

The 3G iPhone is expected to launch soon at the WWDC. One of the primary component winners likely is Infineon (IFX). The company’s cellular chipset is expected to drive the iPhone. As we wait for the teardown. A good friend recently asked me how we would know if InterDigital (IDCC) is in the iPhone. He specifically wanted me to address the issue with respect to the latest IFX 3G product announcements.

Here is my take on it:

We are less than a week off from the Apple Worldwide Developer's Conference 2008 [WWDC] in which the 3G iPhone is expected to make its debut.Over the past year, I have covered the 3G iPhone in great detail. As we head to the WWDC, I thought it will be nice to compile my iPhone predictions about some component suppliers. Take them for what they are - just predictions!

3G Baseband: Infineon (IFX) will be at the heart of the iPhone. The Infineon 3G chip will have a software stack that is jointly developed with InterDigital. The King of Prussia-based InterDigital (IDCC) is also likely to have a good portion of the baseband IP if my guess is right. I am basing this last speculation on the performance of the IFX chipsets in recently conducted tests. Essentially, InterDigital will earn a per-chip royalty for the software stack and possibly for the baseband IP.

In the first part of this series, I looked at the contrasting manufacturing strategies of STMicroelectronics (STM) and NXP. In this concluding piece, I will look at their product decisions with respect to the wireless analog trade-off.

Wireless: With Nokia (NOK) and EMP [Ericsson Mobile Platforms] sourcing from multiple vendors, Texas Instruments' (TXN) strategy of using its baseband along with its application processor and RF modules for the mobile platform seems to have backfired. It is in danger of losing its market share because it has not pursued a 3G baseband product strategy.

Marvell (MRVL) followed up a strong quarter by shaking up its management team. The company, it seems to me, is taking pains to demonstrate that the bad times are now behind it.l

The company has a new CFO in Clyde Hosein who starts on June 23rd. Clyde brings about 25 years of finance and operations related experience in technology industries. Clyde replaces George Urioste who was Marvell's interim CFO since January 2008. George takes over as the acting COO to relieve Pantas Sutardja. Pantas will now focus on his role as the company's CTO.

Apple is expected to announce the 3G iPhone this month.  Based on a reasonable set of assumptions, I have speculated that Infineon (IFX) will continue to be at the heart of the iPhone. Clues that ratify this scenario have also been uncovered in the recent months. Recently, however, there were two industry events that made many question this theory. Here, I will take a look at these events and what they signify for the iPhone.

Firstly, Sehat Sutardja, Marvell’s CEO, had this to say in the company’s F1Q09 conference call:

[In this two-part series, I will compare the strategies of TXN and STM.]

Texas Instruments (TXN) and STMicroelectronics (STM) are leading semiconductor companies. They are second and third respectively among wireless semiconductor solution providers. As I  recently completed my STM valuation series, I noticed the divergent strategies the two companies employed despite broad similarities in their business models and addressed markets.

Qualcomm  (QCOM) recently took a stake in ip.access, a British femtocell maker. The undisclosed investment was made through Qualcomm’s European investment fund. This is a sign that Qualcomm is transitioning from its core competency – to design and develop high capacity wireless baseband technology – to eke out capacity gains through topology.

Before commenting on this latest Qualcomm move, it is important to understand femtocells. Femtocells are indoor base-stations designed to be connected to a broadband internet connection. These devices allow the same mobile device to be used for accessing voice or data through broadband. Femtocells also offer improved in-building coverage, reduced burden on the cellular network and seamless mobility to the user. While dual-mode handsets are seen as the fixed-line operators’ entry-point into wireless, femtocells are regarded as the mobile operators’ answer to it.

Infineon's (IFX) CEO Wolfgang Ziebart recently departed the company. This has given new energy to consolidation speculations, which I think is not without reason.

Ziebart, it is said, was a proponent of small acquisitions and organic growth. His exit seems to have come after internal management disagreements. With Ziebart gone, the doors are now open for larger mergers directed towards consolidation along the lines of the recent STMicroelectronics (STM) - NXP Semiconductor Joint Venture [JV]. One of the possibilities being floated around is a merger with NXP. Another possibility is a wireless JV with Freescale (FSL). These possibilities are not mutually exclusively either.

For a while now, I have been detailing Texas Instruments’  [TI] (TXN)  failure to capitalize optimally on the impending wireless boom. In my valuation series, I pointed out that in addition to all its analog initiatives, if TXN had managed wireless better, my valuation would have increased from $32 to finish closer to the $40 mark. Nothing has changed since. But I am tempted to comment on a couple of recent analyst reports.

Citigroup’s Glen Yeung raised his rating of TXN to BUY from HOLD.By increasing the price target on the stock from $31 to $39, he replaced Intel (INTC) with TXN in Citi’s “Top Picks Live.” His report seems to be primarily based on TXN’s delay in wireless market share loss at Nokia (NOK). This in turn relies on recent comments from Broadcom (BRCM) indicating a delay in its EDGE ramp-up with the Finnish handset vendor. Glen seems to think that this “increased optimism in TXN’s handset revenue opportunity” will sustain TXN longer than consensus estimates.

In my Texas Instruments [TI](TXN) valuation series, I pointed out that the company did not have a strong 3G product strategy. I subsequently discussed in detail the synergies that existed between InterDigital (IDCC) and TI, and also noted that if not InterDigital, then TI could consider Icera as a viable option to buttress its 3G roadmap. Let us take a quick look at this possibility in this post.

Bristol-based Icera Semiconductors has one of the better performing HSDPA products in the market today. The company’s soft modems have been gaining traction in the data-cards market. The company recently announced a merger with Sirific Wireless. Sirific’s RF front-end and digital RF expertise is expected to complement Icera’s Livanto soft modems. Icera also announced a mobile phone design win recently. Combined with Sirific, Icera has raised over $200mn till date. The company is also looking to raise another round on the strength of its recently announced design wins and the broader market traction it has been receiving of late.

In my previous article on convergence, I discussed the mobile baseband radio. While the WAN capability is most important, it also needs to be complemented by the so-called connectivity solutions. WiFi, bluetooth, GPS, FM and mobile TV have increasing penetration in the higher-end phones and will be a part of the convergence devices of tomorrow.

WiFi can facilitate seamless mobility for your voice call while also offloading internet browsing from the cellular network when you are near a wireless hotspot. WiFi can be used in conjunction with cellular systems today to enable fixed-mobile telephony convergence [FMC]. There are dual mode handsets that can offload the burden on cellular networks, address in-building coverage issues and also switch your call seamlessly between the Wide-Area Network [WAN] and the Local Area Network [LAN].

Apple (AAPL)-related rumors always add spice to your day. As we all anticipate the 3G iPhone’s release any day now, we are seeing a steadily increasing spate of news, rumors and ‘leaks’. ZDnet.de recently reported this iPhone story:

As part of an Intel (INTC) event for the 40th birthday of the semiconductor company at Munich’s BMW World, Germany managing director Hannes Schwaderer confirmed today what has long been a rumor on the Internet: namely, that there is an iPhone with Intel’s new Atom chip. The device is slightly larger than the current version, Schwaderer said. That is not, however, because of the Intel chip, but because of the larger display used in the new iPhone.

A friend posed this iPhone question recently:

Could the iPhone run on CDMA with the Infineon (IFX) chip that will be in the 3G GSM phone? Or would different hardware and/or software be required?

InterDigital (IDCC )announced its First Quarter 2008 results on Wednesday. The King of Prussia-based company beat analyst expectations this quarter, addressed the Nokia (NOK) and Samsung litigations, as well as hinted about its 3G iPhone presence.

The total revenues for the First Quarter 2008 were $56mn down from $67.8mn in First Quarter 2007. Last year’s number however includes $18mn royalty audit findings and 2G royalties from Sony Ericsson (SNE). This year’s revenues include $55.5mn in recurring revenues, $53.3mn of which comes from patent licensing royalties. The net income was $7.3 million, or $0.15 per diluted share. This is almost double of the analyst consensus of $0.08 per diluted share.