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HTC Buys a Patent Power Play

HTC is becoming a force to be reckoned with as it reports record Q2 growth and buys a graphics company that owns some important patents

Sarah Thomas

July 6, 2011

2 Min Read
HTC Buys a Patent Power Play

High Tech Computer Corp. (HTC) (Taiwan: 2498) cleaned up in the second quarter, announcing Wednesday it doubled its quarterly income over last year and that it's acquiring a company that will help it compete against Apple Inc. (Nasdaq: AAPL) -- in technology and in the courts.

The handset maker has paid VIA Technologies Inc. $300 million in exchange for all of its shares of S3 Graphics, a company that powers graphics visualization technologies in mobile devices and game consoles. Along with its imaging savvy, HTC will get 235 patents, and more pending applications.

S3, like several mobile companies, has found itself entangled in lawsuits with Apple over intellectual property rights. Apple filed a complaint against S3 with the U.S. International Trade Commission (USITC) last year for patent infringement. A judge ruled last week that Apple had infringed on two of the graphics company's patents related to image compression.

HTC and Apple have also butted heads in the courts. Apple sued the Taiwanese company in March of 2010 for infringing on 20 Apple patents. (See Apple Sues HTC.)

The deal, expected to close before the end of the year, will give HTC S3's entire portfolio of patents, which will help it protect itself against more lawsuits -- from Apple and from other smartphone vendors in what has become a highly litigious industry. (See Samsung Tries to Block Apple Sales in the US, Apple Sues Samsung for iCopying, Apple Escalates Samsung Lawsuit, Apple Hits Back at Nokia and Apple Sues Moto .)

In an unrelated announcement Wednesday, HTC said its unaudited second-quarter earnings results include net income of NT$17.5 billion (US$608 million), more than double what it brought in during the year-ago period. Unaudited revenues for the quarter were NT$124 billion (US$$4.3 billion), a 104 percent increase. Analysts expect the growth to continue into the third quarter owing to HTC's focus on Android smartphones and, soon, Windows Phone 7 devices.

— Sarah Reedy, Senior Reporter, Light Reading Mobile

About the Author(s)

Sarah Thomas

Director, Women in Comms

Sarah Thomas's love affair with communications began in 2003 when she bought her first cellphone, a pink RAZR, which she duly "bedazzled" with the help of superglue and her dad.

She joined the editorial staff at Light Reading in 2010 and has been covering mobile technologies ever since. Sarah got her start covering telecom in 2007 at Telephony, later Connected Planet, may it rest in peace. Her non-telecom work experience includes a brief foray into public relations at Fleishman-Hillard (her cussin' upset the clients) and a hodge-podge of internships, including spells at Ingram's (Kansas City's business magazine), American Spa magazine (where she was Chief Hot-Tub Correspondent), and the tweens' quiz bible, QuizFest, in NYC.

As Editorial Operations Director, a role she took on in January 2015, Sarah is responsible for the day-to-day management of the non-news content elements on Light Reading.

Sarah received her Bachelor's in Journalism from the University of Missouri-Columbia. She lives in Chicago with her 3DTV, her iPad and a drawer full of smartphone cords.

Away from the world of telecom journalism, Sarah likes to dabble in monster truck racing, becoming part of Team Bigfoot in 2009.

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