HTC may re-evaluate S3 Graphics acquisition

A four months ago HTC announced its intention of buying S3 Graphics and $300 million and purchasing it immediately, and it seems that purchase may come to a harsher end. HTC wanted to use S3 Graphics portfolio against Apple to make a bargain deal with already suing Apple over iPhone Vs. HTC Android devices. Their intention was to get cross licensing or some other harmonious terms with Apple, but it seems that is not going through.

Monday, 11/22/2011, US ITC formally dismissed the S3 Patent infringement by Apple in its Mac platform, which is direct overturn of July ruling favoring HTC/S3 that Apple violates S3’s IP portfolio . In addition to its poor sales of Android devices during the last quarter and already tanking profit margins on the Android devices, HTC couldn’t digest this information. Now they have second thoughts about acquiring S3 Graphics. HTC already cut its fourth quarter revenue estimation.

According to Wall Street Journal, HTC is re-evaluating its $300 million acquisition of S3 Graphics after its lost to Apple, Inc. on Monday regarding its dispute on Mac line of Apple is violating S3’s portfolio.

Apple Insider quotes “HTC acquired S3 earlier this year for $300 million in hopes of gaining a valuable bargaining chip in its ongoing dispute with Apple. Chief Executive Peter Chou has since worked to reassure investors that the value of the S3 Graphics purchase will exceed its high price.”

S3 Graphics however can fight with Apple, but definitely this might not help HTC in anyway.

Read more about this at Apple Insider.

Sources: Apple Insider, WSJ