HTC continues to ride Android wave

The same day that smartphone maker HTC blew past analyst expectations, announcing unaudited second-quarter revenue results of $608 million — more than double its results from a year ago — it confirmed it is also purchasing California-based S3 Graphics Co., a move motivated by S3's patent portfolio.

S3 creates image-compression technology that's used in gaming consoles such as the Nintendo Wii and Sony PlayStation, and according to Bloomberg, the purchase comes at a price of $300 million cash and includes the benefit of potentially bolstering HTC in its patent battles against Apple.

Android-running handsets — which have in large part contributed to HTC's financial success — are the Apple iPhone's largest rivals, and in March 2010, Apple filed a lawsuit against HTC in the state of Delaware and with the International Trade Commission (ITC), accusing HTC of infringing on 20 Apple patents related to the iPhone's user interface, architecture and hardware.

“We can sit by and watch competitors steal our patented inventions, or we can do something about it," Apple CEO Steve Jobs said in a statement at the time.

In May, HTC retaliated, filing its own patent-infringement suit against Apple with the ITC and calling for a stop to the importation of iPhone, iPad and iPod devices.

Last week, Apple further increased the number of patents in its pockets. For $4.5 billion, Apple, with partners EMC, Ericsson, Microsoft, Research In Motion and Sony, purchased from Nortel Networks more than 6,000 patents and patent applications spanning wireless, wireless 4G, data networking, optical, voice, internet, service provider, semiconductors and other patents (CP: Nortel patents go for $4.5 billion to consortium).

Google, in a move that would have worked to HTC's advantage, bid $900 million for the patents, but was ultimately rejected.