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Technology Stocks : S3 (A LONGER TERM PERSPECTIVE)
SIII 0.00010000.0%May 12 5:00 PM EST

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To: stock talk who wrote (8372)12/13/1997 1:47:00 PM
From: Ken Muller  Read Replies (3) of 14577
 
Frank:

>>The question in my mind is why would S3 and Intel agree to 50-100 million settlement without as so much as a lawsuit????<<

In my discussions with some S3 people over the last 3-4 months there has been some mention of S3's interest in the Cirrus graphics division. (This thread has also discussed the issue.) The response I got from S3 personnel was that their interest was strictly in the patents. So, I guess there is some unanimity on their importance. It was my impression that S3 wanted to use these patents to control the graphics market. Makes sense, I guess.

The licensing is a little different proposition. If Intel agrees to the licensing deal, that puts S3 between a rock and a hard place (their usual position these days). You can make a much better deal now than if you lose a lawsuit later. Also, there is always the danger that Intel would purchase the patents outright. With Intel under their belt, Cirrus would then go after the other competitors in the marketplace.

My Machiavellian take on this story is that it is Intel's way of weakening S3's financial position at a critical time. They intend to let Cirrus do the dirty work. The nightmare continues.

Happy Holidays,
Ken
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