In a move that is going to surprise approximately no one who knows anything about selling smartphones, HTC has indicated to CNET that it no longer plans to bundle Beats headphones with its handsets.

The reasoning should be pretty obvious - people aren't going to buy a smartphone on the basis that it comes with a pair of decent headphones. Headphones are a separate market, and if you care about them at all, you're going to buy them separate of any other hardware. The fact that Monster is no longer Beats' manufacturing partner is probably linked to this "decision," as well (HTC owns a 51% stake in Beats, and Monster and Beats have now parted ways).

While HTC has integrated Beats Audio (read: software equalization, upgraded speakers and DSPs) into a number of its smartphones, it obviously doesn't make much sense to spend money including premium headphones with devices when they're not a point of competition in the marketplace. More likely, HTC will pursue a strategy of selling Beats headphones as accessories in carrier stores and other electronics retail locations, something Beats has been very successful with in the past.

Beats controls over half of the lucrative headphone market in the US by revenue, and the brand has shown no signs of slowing down in recent months. The stylish, bass-heavy, and overpriced cans have been gobbled up by teenagers and the hip-hop culture. They're so successful that Ludacris has launched a competing brand - SOUL - to try and take advantage of the burgeoning market for designer headphones.

HTC says its plan all along was to incorporate "Beats technology" (read: bass-heavy equalization and a logo) into its phones, rather than make Beats headphones synonymous with HTC handsets. More and more, this deal is sounding like HTC paid for the right to slap a logo on its hardware, rather than to provide consumers with a superior audio experience.

CNET