KING OF PRUSSIA, Pa.—(BUSINESS WIRE)—October 31, 2007— InterDigital, Inc. (NASDAQ: IDCC) today announced results for the third quarter and nine months ended September 30, 2007 and the authorization of a $100 million share repurchase program. Highlights for third quarter 2007 include:

-- Net income of $8.7 million, or $0.18 per diluted share;

-- Revenue of $56.5 million; and

-- Cash and short-term investments totaling $189.8 million

"We are pleased to report another profitable quarter," commented William J. Merritt, President and Chief Executive Officer. "We continue to build on our successful patent licensing program with the addition of new agreements with Apple and RIM."

"Our dual-mode 2G/3G ASIC program also took a significant stride forward with last month's receipt of engineering samples from the foundry. This ASIC, which is one of the few solutions in the market that incorporates HSDPA/HSUPA capabilities, is functioning well in lab testing and we expect to commence prospective customer testing by the end of November," added Mr. Merritt. "We will also continue interoperability testing with major infrastructure vendors. Based on customer feedback to date, our offering provides very appealing performance advantages."

"With our strong cash balance, including the receipt of an additional $26 million in royalty prepayments early in fourth quarter 2007, I am also pleased to announce that the Board of Directors has approved a $100 million share repurchase authorization. This authorization follows a $350 million repurchase program which we completed in second quarter 2007 and underscores InterDigital's commitment to enhancing shareholder value, our confidence in our ability to add new licensees on favorable terms, and our ability to generate strong free cash flow(1) from our solid base of current licensees," concluded Mr. Merritt.

As with the prior authorizations, InterDigital may purchase shares from time-to-time through open market purchase, pre-arranged trading agreements, or privately-negotiated transactions. The amount and timing of the repurchases will be based on a variety of factors, including general business and market conditions, cash requirements, strategic investment opportunities, and the timing of signing any new license agreements.

Third Quarter Summary

The company's net income totaled $8.7 million, or $0.18 per fully diluted share, in third quarter 2007 compared to $21.7 million, or $0.40 per fully diluted share, in third quarter 2006. Third quarter 2006 net income included approximately $8.1 million, or $0.15 per diluted share, related to the resolution of patent licensing matters with Nokia.

Revenue in third quarter 2007 totaled $56.5 million compared to $67.2 million in third quarter 2006. Revenue in third quarter 2006 included $12.5 million related to the resolution of patent licensing matters with Nokia. Recurring patent license royalties from continuing and new licensees grew 17 percent over the comparable quarter in 2006. Licensees that accounted for 10 percent or more of the $56.5 million of recurring patent license royalties and technology solution sales were LG (26 percent), Sharp (24 percent) and NEC (13 percent).

Third quarter 2007 operating expenses of $46.0 million increased $9.2 million compared to third quarter 2006, but decreased by $1.2 million compared to second quarter 2007 (excluding the expense associated with the Federal Arbitration award recorded in second quarter 2007). The year-over-year increase primarily resulted from (i) an increase in litigation and arbitration expenses (which totaled $10.7 million), (ii) increased patent portfolio amortization, management and maintenance costs and (iii) increased investment in the development of our dual-mode 2G/3G ASIC. The decrease in third quarter 2007 operating expenses over second quarter 2007 was attributable to reduced consulting and design services related to product development and other consulting services.

Net interest and investment income of $2.1 million in third quarter 2007 decreased from $4.1 million in third quarter 2006 due primarily to lower investment balances and interest rates in third quarter 2007.

The company's third quarter 2007 effective tax rate was 31 percent due in part to tax credits associated with our 2007 development activity. Third quarter 2006 tax expense consisted of a 37 percent provision for federal income taxes which included the amortization of foreign withholding taxes.

Nine Months Summary

Net income for first nine months 2007 totaled $22.0 million, or $0.44 per fully diluted share, compared to $205.0 million, or $3.65 per fully diluted share, in first nine months 2006. Approximately $162.2 million or $2.83 per fully diluted share of the 2006 net income related to the resolution of patent licensing matters with both Nokia and Panasonic.

For first nine months 2007, revenue totaled $179.4 million compared to $415.4 million in first nine months 2006. Results for 2006 included $240.5 million and $12.0 million related to the resolution of matters with Nokia and Panasonic, respectively. Recurring patent license royalties in first nine months 2007 increased 5 percent to $165.8 million from $158.0 million in first nine months 2006. Recurring patent license royalties from continuing and new licensees for first nine months 2007 grew 12 percent over the comparable nine months 2006.

During first nine months 2007, the company generated $85.4 million of free cash flow compared to $294.5 million in 2006. Free cash flow in first nine months 2006 included $253.0 million related to the resolution of patent licensing matters with Nokia. First nine months 2007 free cash flow was driven primarily by receipts from patent licensing agreements totaling $254.5 million, offset, in part, by cash-based operating expenses, capital investments and changes in working capital.

Excluding a $16.6 million charge related to the Federal Arbitration Award, operating expenses for first nine months 2007 of $137.0 million increased $31.4 million compared to the first nine months 2006. This increase primarily resulted from (i) an increase in litigation and arbitration expenses, (ii) increased patent portfolio amortization, management and maintenance costs and (iii) increased investment in the development of our dual-mode 2G/3G ASIC.

Net interest and investment income of $7.0 million in first nine months 2007 decreased $2.5 million from first nine months 2006 due primarily to lower investment balances in 2007.

The company's effective tax rate was 33 percent for first nine months 2007, reflecting a research and development credit associated with our 2007 development activity. Tax expense for first nine months 2006 consisted of a 36 percent provision for federal income taxes which included the amortization of foreign withholding taxes.

Fourth Quarter 2007

Consistent with the company's practice, revenue guidance for fourth quarter 2007 will be provided following the receipt and review of applicable royalty reports.

Scott McQuilkin, Chief Financial Officer commented, "We continue to focus on effective management of our costs, which contributed to the reduction in our third quarter operating expenses from second quarter levels. In line with our aggressive push to get our products to market, we currently expect that fourth quarter operating expenses, excluding patent arbitration and litigation costs, will grow within a 5 to 10 percent range above the second quarter level. We also currently expect that our patent arbitration and litigation costs in fourth quarter 2007 will increase over third quarter based on the expected level of activity. Lastly, we currently expect that our book tax rate for the fourth quarter of 2007 will approximate 33 percent."

About InterDigital

InterDigital designs, develops and provides advanced wireless technologies and products that drive voice and data communications. InterDigital is a leading contributor to the global wireless standards and holds a strong portfolio of patented technologies which it licenses to manufacturers of 2G, 2.5G, 3G and 802 products worldwide. Additionally, the company offers baseband product solutions and protocol software for 3G multimode terminals and converged devices. InterDigital's differentiated technology and product solutions deliver time-to-market, performance and cost benefits. For more information, please visit InterDigital's web site: www.interdigital.com.

This press release contains forward-looking statements regarding our current beliefs, plans, and expectations with respect to: (i) the continued growth of our patent licensing program; (ii) the timing of prospective customer and interoperability testing of our dual mode 2G/3G ASIC; (iii) performance advantages of our dual mode 2G/3G ASIC; (iv) our strong free cash flow position; (v) fourth quarter 2007 revenue guidance; (vi) fourth quarter 2007 operating expenses excluding patent arbitration/litigation expense; (vii) fourth quarter 2007 patent arbitration/litigation expense; and (viii) our estimated book tax rate for fourth quarter 2007. Words such as "may," "will," "expect," "update," "anticipate," "continue to," "ability to," "approximate," or similar expressions are intended to identify such forward-looking statements.

Forward-looking statements are subject to risks and uncertainties. Actual outcomes could differ materially from those expressed in or anticipated by such forward-looking statements due to a variety of factors including, but not limited to, those identified in this press release as well as the following: (i) unanticipated delays, difficulties or acceleration in the execution of patent license agreements; (ii) our ability to leverage our strategic relationships and secure new patent licensing and technology solution agreements on acceptable terms; (iii) unanticipated delays or difficulties in our technology development efforts, testing and evaluations, and our reliance upon third parties for infrastructure equipment; (iv) changes in the market share and sales performance of our primary licensees, delays in product shipments of our licensees, and timely receipt and final reviews of quarterly royalty reports from our licensees and related matters; (v) unanticipated product development expenses and other unanticipated operational costs and the timing of such expenses and costs; (vi) changes in technology preferences, needs, availability, pricing and features of competitive technologies and product offerings; (vii) the resolution of current legal proceedings, including any awards or judgments relating to such proceedings, additional legal proceedings, changes in the schedules or costs associated with legal proceedings, or adverse rulings in such legal proceedings; and, (viii) changes in our expectations for the amount and composition of full-year taxable income, changes in the amounts of our 2007 U.S. federal research and experimental credit and foreign tax credits, changes in foreign and domestic tax laws or treatises, or changes in our tax planning strategies. We undertake no duty to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law, regulation or other competent legal authority.