HTC’s S3 acquisition: it’s all about the patents

Looks like my last guess was close to the mark yesterday. HTC has admitted today that the company’s acquisition of S3 Graphics was mainly for the patents. According to HTC’s CFO, Winston Yung, yesterday(s acquisition was done to help HTC in it’s ongoing battle against Apple (an US ITC judge ruled that Apple infringed on two of S3′s patents earlier this month) and to secure some valuable patents that could come in handy in case other companies decide to sue the Taiwanese smartphone manufacturer:

“In patent negotiations, it is difficult if the other company has patents and you don’t. If you have patents too, perhaps you can arrive at a cross-licensing agreement,”
“We’re not talking about five years before we will see financial benefits and returns, we’re talking about using these patents to start generating revenue now,”

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HTC acquires stake in S3 Graphics from VIA


This doesn’t make much sense but HTC has apparently decided to acquire a stake in S3 Graphics from VIA for US$300 million. Back in the 90s S3 was known for making discrete graphics cards and the now infamous S3 Virge which was also known as the first graphics “decelerator” because of its relatively poor performance. S3′s major claim of fame was the introduction of the S3TC texture compression algorithm which was later licensed by Microsoft and integrated into Direct3D as DXTn.

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