19
Aug
beats

The partnership between HTC and the Beats By Dr. Dre company has been one of the more visible aspects of the former's branding over the last three years. Ever since HTC bought 50.1% of the company for an estimated $300 million in 2011, the headphone maker's iconic logo has had a reserved spot on both devices and software. But according to a report from the Wall Street Journal, Beats is looking to end the relationship in order to find a new partner for greater expansion.

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That wouldn't be all that difficult for Beats. They bough 25% of the company back from HTC in 2012 for $150 million, making HTC a shareholder instead of a majority owner. Ever since then, a never-ending line of de-facto celebrity endorsements and new products has kept Beats at the height of consumer consciousness, growing revenue from $200 million in 2010 to an eye-popping $1 billion in 2012, with 59% of the US premium headphone market to its name. By contrast, HTC has been largely stagnant, losing market share to Samsung (just like everyone else) and failing to keep its ground despite the impressive One family of devices and its Beats and BoomSound branding. HTC's plan to bundle Beats headphones with new phones died out quickly.

Beats would probably need to pay back considerably more than $150 million to gain that last quarter-share, but it wouldn't be that much of a stretch, and HTC could use the cash. The WSJ reports that Beats wants the freedom to pursue new markets in home theater and car stereos, plus an online music streaming service. (Beats has so far failed to leverage MOG, a streaming service that it bought for $12 million last year.) But once they're free of HTC, you can bet that Beats will look for greener pastures when it comes to mobile devices. Beats already partners with HP for joint branding on Windows laptops and some tablets, a deal which pre-dates the 2010 buyout.

Representatives from Beats and HTC have declined to comment. All this information should be considered rumor at the moment, but the Wall Street Journal is rarely wrong in these matters. A deal makes sense for both parties.

Source: The Wall Street Journal

Jeremiah Rice
Jeremiah is a US-based blogger who bought a Nexus One the day it came out and never looked back. In his spare time he watches Star Trek, cooks eggs, and completely fails to write novels.
  • http://www.Nave360.com Sebastian Gorgon

    I was hoping for that music streaming service from Beats to be free or significantly cheaper on HTC devices, but seeing as their relationship is about to end, the chances of that happening are almost 0... i mean if HTC bundled in free music streaming with all HTC phones, they could get a lot of sales from that.

  • šauma

    It's just a stupid equalizer and nothin' more.

    • shameonyou

      Thats like saying louis Vuitton is just a bag, or alienware is just a computer. SHAME.

      • CyanogenMod User

        But louis Vuitton is just a bag, its nothing special that needs to hyped up, alienware is just a computer. You're point is moot since beats is nothing more than an equalizer which can be replicated on any device.

        • Ryan Wallace

          Yup you're 100% correct on that, DSP Manager does the same thing as beats... and it didn't cost any extra...

  • Thomas’

    "Beats audio for my high definition home theatre? Sign me up!"
    -Said no own ever.

  • http://www.androidpolice.com/ David Ruddock

    Beats already has deals with car OEMs, namely Chrysler / Fiat Group.

  • Matthew Fry

    I actually like Beats on my One and didn't they figure out that on the One it amounted to more than just EQ tweaking? If I recall it was some internal component plating that reduced noise or something. Regardless, the manufacturer can easily replicate this on future devices.

    In fact, this is an opportunity for HTC to target the audiophiles and enthusiasts alike by putting in a quality headphone amp in their phones and really distinguish themselves among the competition. With it they could aggressively target the iPhone users that pride themselves on audio quality it doesn't actually have.