S3 has quietly formed an internal subsidiary to design and sell Transmeta-based Internet access devices, part of a retooling of S3 itself,
reports TechWeb. 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.