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HTC to complete purchase of S3 Graphics

2012/06/12 19:24

Taipei, June 12 (CNA) Taiwanese smartphone maker HTC Corp. said Monday that it will continue its plans to buy U.S. graphic chipset designer S3 Graphics Co. with an eye on its strong patent portfolio.

Grace Lei, HTC's general counsel, said that HTC affirms the patent values of S3 because the U.S. International Trade Commission (ITC) had found in a preliminary ruling in 2011 that Apple Inc. had violated S3 patents.

"We think S3's patent portfolio is valid and strong, and we have decided to complete the purchase of S3 after cautious assessment," Lei said at an annual shareholders' general meeting.

S3 currently owns about 270 patents, some of which are licensed to Sony Corp, Nintendo Co. and Microsoft Corp., Lei added.

S3 accused Apple in May 2010 of violating four patents owned by the company. The ITC ruled July 26 last year in a preliminary decision that Apple's Mac OS X system had infringed on two texture compression patents of S3, but said the iPhone and iPad had not.

Following the ITC's preliminary decision, HTC announced its purchase of S3 for US$300 million to expand its patent portfolio, as HTC and Apple have been locked in a patent war since May 2010.

However, HTC said last November that it would re-examine its acquisition of S3 after the ITC overthrew the July 26 preliminary decision, ruling that Apple's Mac OS X system had not infringed on any patents held by S3.

Addressing Taiwanese consumers' complaints about the less sophisticated version of the HTC One S smartphone offered in Taiwan, HTC CEO Peter Chou admitted that the phone indeed lacks certain components.

Local consumers have complained that the Taiwanese version of the phone uses older S3 chips from Qualcomm Inc. instead of the latest S4 chips, raising concerns that the Taiwanese version is not as power efficient as the versions sold in the U.S. and Europe, according to local media reports.

According to Chou, the two chips used in the models sold in Taiwan and in other regions are actually "the same chips" made with different process technologies.

In the past few years, HTC has usually launched its new devices in Europe and the U.S. in the first wave rather than Taiwan because of the bigger market size, so that Taiwanese consumers do not get the latest HTC products in time.

The 4.3-inch HTC One S, featuring a 1.7 gigahertz dual-core processor and an 8-megapixel camera, hit store shelves in Taiwan this month at a price of NT$17,900 (US$598).

(By Jeffrey Wu)ENDITEM/J