Taiwanese smartphone maker HTC clearly did not take Chinese New Year off. On the first day after public holidays ended, HTC announced it had made two investments that could expand its online offerings.
The first is buying a US$40m stake in OnLive, the company offering console-style games over the internet. The second is a GBP30m acquisition of Saffron Digital, a London-based mobile video specialist.
HTC was not saying much about its plans for these investments before next week’s Mobile World Congress. But with these deals, and a partnership with e-reading company Kobo announced last September, the contours of what HTC’s online content strategy might look like are becoming clear.
HTC has already started hiring staff to work towards the possible launch of an online store, and it is now busy striking up partnerships with content distributors. These deals make sure that when the store comes online, HTC will have content to sell that is distinct from rival Android phonemakers such as Samsung or Motorola.
OnLive, for example, had just said at CES that it was expanding to mobile devices as well as home TVs and PCs. It’s not hard to see them now integrating their service into HTC’s smartphones.
There are several points to note about these deals. The first is that they are all with distributors rather than actual creators of content. This saves HTC from having to negotiate directly with thousands of publishers across the book, video and game industries.
The second is that it appears HTC’s partners will retain a large degree of autonomy. OnLive already has an application on the iPad – though that doesn’t support actual gameplay. Its CES announcement also said it was integrating its gameplay service into Vizio’s tablets and smartphones. In Saffron’s case, even though HTC is acquiring the entire company, Saffron will remain an independent agency free to also offer its services to others, such as its current customers Nokia and Sony Ericsson.
In theory, this means that Samsung and others could also turn to OnLive and Saffron to replicate what HTC has done. But in reality, it seems more likely that HTC will remain much closer to these companies because of its share ownership.
The final point is that, now that HTC has covered text, video and games, there are two areas it is still missing – music and applications. It should not be that hard for HTC to find a music distributor, but platforms for distributing applications would be much more difficult.
Fortunately, there is always one fall back for that: Google’s Android Market, available to HTC and all its competitors.
