CSR buoyant despite patent case

Shares in the Cambridge-based firm soar after an upbeat forecast, as it wades into a US Bluetooth patent lawsuit

UK chipmaker CSR has shrugged off the looming threat of overseas litigation with a set of strong financial results and confident predictions for the future.

CSR, which manufactures Bluetooth and Wi-Fi chips for mobile devices, announced a 33 percent increase in operating profits throughout 2006, to £76m. Revenue for the year rose 45 percent to £359m. However, profits and revenue in the fourth quarter of 2006 both fell.

Despite this, chief executive John Scarisbrick insisted that CSR — one of the UK's technology success stories in recent years — is set to perform well in 2007.

"Overall, the Bluetooth market continued to grow robustly, both in mobile phones and in an increasing range of non-cellular applications," said Scarisbrick, citing the automotive industry and the gaming sector as attractive target markets for the future.

CSR has a significant share of the market for Bluetooth chips within mobile phones. In 2006, 99 of the 226 Bluetooth-compatible mobile phones designed by major vendors included a CSR chip, the company said on Thursday.

CSR's shares surged in trading on Thursday, and closed up 57.5p at 806.5p. They rose again on Friday morning to 820p, before settling at around 810p by Friday lunchtime.

Investors may have been encouraged that a patent case filed last month in the US does not seem to be damaging CSR. The Washington Research Foundation has claimed that Nokia, Samsung Electronics and Panasonic have infringed its patent on wireless communications technology, because they used CSR chips in products sold in the US.

The foundation claims that a patent granted to it in the 1990s covers CSR's Bluetooth technology, and that CSR's failure to buy a licence from it means products containing CSR Bluetooth chips may not be sold in America.

CSR is not itself being sued, as it does not sell the products in question, but there were concerns in January that the case could scare off mobile device manufacturers.

CSR did not even mention the case in its full-year financial results statement, but the company did reveal to journalists and analysts on Thursday that it has filed a motion to intervene in the case.

"The company believes this case has no merit," explained a CSR spokesman.