This paper presents new fixed-rate texture compression systems for RGB and RGBA images, which use variable precision differential encoding for the color codewords, resulting in reduced compression artifacts, in particular for smooth color variations. Experiments using hundreds of textures show that they achieve higher quality than the commonly used S3TC at the same compression ratio or (for RGBA images) similar quality to S3TC at twice the compression ratio. In hardware implementations a large part of decompression hardware can be shared with existing common systems, minimizing the amount of additional hardware needed.