HTC cuts revenue forecast, re-evaluates $300M purchase of S3 Graphics

Device maker HTC cut its fourth quarter revenue forecast as much as 23 percent and said that it is re-evaluating its $300 million purchase of S3 Graphics Co. The announcement comes just days after the company lost a patent-infringement case against Apple (NASDAQ:AAPL) related to S3 patents. 

HTC said it expects fourth quarter sales to be the same as last year, around $3.4 billion, down from last month's forecast of $4.1 billion $4.43 billion. The Taiwan-based company attributed the reduced forecast to the global economic crisis and increased competition from Apple and Samsung.

Earlier this week, the U.S. International Trade Commission ruled that Apple did not violate patents held by video and graphics firm S3 Graphics. HTC's purchase of S3 (and S3's portfolio of 235 patents) was seen as armor that HTC could use in its patent battle with Apple, which has been ongoing since March 2010.

Interestingly, S3 Graphics, based in Fremont, Calif., is owned by HTC chairwoman Cher Wang and VIA Technologies Inc., a Taiwan chipmaker whose board she also chairs.

HTC isn't the first company to lower its guidance because of the global economic crisis. Earlier this month Alcatel-Lucent (NASDAQ:ALU)  lowered its full-year 2011 operating margin forecast to 4 percent, 1 percent below its previous target.

For more:
- see this Bloomberg article

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