"S3 has quietly formed an internal subsidiary to design and
sell Transmeta-based Internet access devices, part of a retooling
of S3 itself."
"S3 Inc., the Santa Clara, Calif.-based company that once
dominated the graphics market, is in the midst of trying to
reposition itself as a dual-purpose digital media and
Internet-access company. The process began in April, once the
company had shifted its graphics chip unit to a joint venture
between itself and Via Technologies Inc."
"Now, S3 (stock: SIII) is more of a consumer electronics company
than anything else. S3's three core businesses are anchored by the
Rio MP3 player the company helped popularize; a line of HomeFree
home networking products; and the new subsidiary, whose name has
not been disclosed. The strategy has paid off: S3 reported
second-quarter revenue of $135.8 million, compared with $57.3
million for the second quarter a year earlier."