HTC Bets Big On Enterprise Market, Invests $35.4 Million In Magnet Systems

by Gaurav Kheterpal on August 21, 2012

There’s no doubt that Android is fast emerging as the world’s favorite mobile operating system, by sheer weight of numbers. While Samsung has aptly utilized this golden opportunity to assert itself in the global smartphone market, seeing a market share of 33 percent – up from 17 percent at the same time last year, things haven’t gone as per plan for HTC.

So much so, that HTC is now believed to quickly slipping into irrelevance in the North American market. Clearly, something had to give and a strategic change was the need of the hour for the ailing HTC.

Therefore, it’s no surprise that HTC is now betting big on the enterprise segment. Earlier this week, the Taiwanese smartphone maker invested US$35.4 million in Silicon Valley-based Magnet Systems, a mobile enterprise apps provider. The deal is a clear shot at RIM as HTC makes a valiant effort to to combine cloud and mobile technology with social enterprise services, aiming to cut out some overhead from the “middleware.”

Interestingly, Magnet Systems is a relatively low-profile player and by my own honest admission, I’d never heard of this company earlier. A quick glance at their website indicates the company is “building a software platform to accelerate the emergence of a new generation of enterprise applications. Combining social, mobile, and cloud technologies, Magnet’s goal is to make it fast and easy to build business applications with social and mobile capabilities while reducing the overhead and complexity of traditional middleware.

However, the announcement is perhaps ill-timed as a couple of days back HTC admitted that its investment in OnLine—a U.S. cloud-based gaming company that sold its assets and fired half its employees Aug. 17—will result in a $40 million loss. None the less, analysts view it as HTC’s attempt to capitalize on the BYOD momentum in the enterprise. With RIM fading out fast from the enterprise segment, HTC would be vying for supremacy in this lucrative segment.

Though HTC established itself as an Android leader several years ago, but much like other big names in the mobile market like RIM and Nokia, the Taiwanese company simply failed to continue to innovate, watching its mobile momentum come to a grinding halt. In fact, while new HTC releases are finding some success in China, here in North American the company has simply not been able to compete with the likes of Samsung and Apple.

It would be interesting to see whether Magnet’s resources can help HTC make some inroads into vertical market customers.

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Written by: Gaurav Kheterpal. Follow TheTelecomBlog.comby:RSS,TwitterFacebook, or YouTube.

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