HTC loses $40M from OnLive, invests $35.4M in enterprise app maker Magnet Systems

As if HTC’s hasty investment in Beats Audio wasn’t problematic enough, the Taiwanese phone maker announced today that it would lose $40 million from its stake in troubled cloud gaming firm OnLive.

But that’s not stopping HTC from making further curious deals: It also announced a $35.4 million investment in Magnet Systems, which has developed a platform for mobile enterprise app development and deployment.

HTC blamed OnLive’s controversial restructuring for its loss, which involved selling the company’s assets to new investors (and erasing any equity employees had in the company originally). HTC invested $40 million in OnLive early last year to get a foothold in the burgeoning cloud gaming market, which allows consumers to stream games over the Internet with no download or installation required.

With Magnet, HTC is clearly trying to make its phones palatable to businesses and potentially offer something comparable to Apple’s iCloud. The company says Magnet’s software will bring “social, mobile, and cloud capabilities to HTC’s portfolio of service offerings.” It’s an interesting move after HTC shut down its Sense cloud storage service earlier this year.

We’d have much more faith in HTC’s Magnet deal if the company didn’t already blow $300 million last year on the overhyped audio company Beats. Luckily for HTC, Beats rebought half of its shares for $150 million last month (though HTC expected a $4.8 million loss from the deal).

With a predicted slow quarter ahead, HTC probably needs to consider its investments more wisely. Once one of the most successful Android device makers, HTC was eventually toppled by Motorola and Samsung (although now even Motorola is struggling). HTC is changing its strategy up this year by focusing on a few key devices, like the One series, instead of several releases throughout the year. But as much as we liked the One S, HTC is still struggling to keep pace with the iPhone and Samsung’s Galaxy S II

Photo: Devindra Hardawar/VentureBeat