TAIPEI—Smartphone maker HTC Corp. agreed to acquire all of the shares of U.S. mobile Internet applications company Dashwire Inc. for as much as US$18.5 million, in a move that could give it more tools in possible future patent litigation against competitors, including Apple Inc.
In a statement, HTC said it would purchase Seattle-based Dashwire to strengthen its mobile cloud-based services offering. Cloud services allow users to store data, documents, and photos via the Internet rather than on devices.
HTC's director of investor relations, Joey Cheng, declined to elaborate on the patent aspect of the acquisition.
Dashwire offers services that enable users to send text messages, make telephone calls, save photos, synchronize contacts, videos and settings from their mobile phones to connected accounts.
HTC has been increasing its investments in mobile technology and beefing up its content and applications business to expand in the fast-growing smartphone segment in its bid to keep up with rival Apple. HTC's Mr. Cheng said the company would continue to use spare cash to invest in future technology and patents. As of July 29, the company had cash and cash equivalents of 116.44 billion New Taiwan dollars (US$4.01 billion).
The acquisition of Dashwire comes a month after HTC said it plans to acquire California-based S3 Graphics for US$300 million in a move to gain leverage over Apple in a continuing legal battle as the two jockey for market share in the increasingly crowded smartphone market.
On Thursday, the U.S. International Trade Commission released details of a July 1 ruling that found in favor of S3 and declared that some Apple products did violate patents held by S3. But it found against S3's claim that some of Apple's high-profile mobile products, including the iPad and iPhone, violated its patents, a finding analysts say reduces S3's use as a bargaining chip in HTC's legal battle with Apple.
In April, All Things Digital reported that Dashwire acquired patents and licensed the portfolio of Intellectual Ventures, a company run by former Microsoft Corp. executive Nathan Myhrvold that owns the rights to more than 20,000 patents. Intellectual Ventures has signed licensing agreements with companies including Google Inc., Intel Corp. and Microsoft and has many patents related to smartphones.
Samsung Securities analyst Birdy Lu said the deal should give HTC better protection in patent litigation due to the Dashwire licensing agreement with Intellectual Ventures, but noted that Dashwire can use the patents for defensive purposes, not to sue others.
The acquisition will also help HTC launch its own mobile instant-messaging services, in line with its strategy of differentiating itself from Android peers through its mobile applications and services, he said.