On2 Acquires Video Technology Provider For Mobile In An Effort To Extend Reach To Devices

On2 announced yesterday that it had acquired Finland based Hantro Products Oy in a cash and stock deal valued at around $58.4 million. Hanto provides video compression technology for mobile, consumer electronics and IPTV devices. The press release says that Hanto’s technology has been implemented on more than 200 million devices and in mobile phones produced by 5 of the top 6 handset manufacturers.

On2 said the Hanto business is expected to generate between $8.1 and $12.2 million in revenue this year which should really help On2’s bottom line. For a company that has excellent traction in the market, a set of really robust products and many happy customers for its Flix product line, I always found it odd that On2’s revenue has always been so low. For Q1 of this year their revenue was only $2.8 million.

On2’s move of focusing on the chipset comes as no surprise considering how mobile devices are finally starting to become adopted in the States and already have better traction overseas. If On2 can give increased video quality with lower power consumption demand and lower silicon costs for manufactures like they say, then this will be an interesting product offering to watch.