HTC sells controlling Beats Audio stake as smartphones stumble

Chris Davies - Jul 22, 2012, 9:00am CDT
HTC sells controlling Beats Audio stake as smartphones stumble

HTC has scaled back its role in Beats Audio, with the headphones manufacturer buying back half of HTC’s shares in the company as the smartphone firm struggles to find its feet once more. Described as “a realignment of their business agreement” the deal will see Beats buy 25-percent of HTC’s 50/50 holding, ending up with 75-percent ownership; however, the two companies insist that they still intend to work together.

“Over the last year, HTC and Beats have made great progress in sound innovation, product integration and brand awareness with successes like the HTC One” the companies said in a statement this weekend. “HTC and Beats will continue to work closely, including a joint global marketing campaign later this year.”

As a result of the agreement, Beats Audio will have “more flexibility for global expansion” though HTC will continue to have a “major stake and commercial exclusivity in mobile.” That means no Samsung, LG or Motorola phones with Beats Audio tech inside.

Several HTC devices in recent months have included Beats technology, which usually comprises special tuning and/or EQ profiles along with bundled headphones that exceed the quality we’ve grown to expect from the usual in-box fare. However, HTC has yet to capitalize on the potential of Beats integration with a solid content sales strategy; as we’ve observed before, the company lacks a solid music store in the same manner as Apple’s on-device iTunes story.

Selling off some of the Beats stake will return some much-needed cash to HTC’s wallet; the deal to invest in 50-percent of the headphones company cost the smartphone firm $300m roughly a year ago. In the intervening months, however, HTC has seen sales struggle, though it has insisted that it remains committed to the Beats partnership.

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43 Responses to HTC sells controlling Beats Audio stake as smartphones stumble

  1. They should bring Beats Audio to HTC Windows Phone 8 devices. WP8 has a solid music store like iOS does. Android is just a mess when it comes to organizing your music and keeping it in one place.

    • “WP8 has a solid music store like iOS does”
      LOL, oh man thanks I needed a chuckle this today. Hey just so you know “Windows phone is dead”.

      • You obviously dont get it son. The music store is beautifully integrated to WP unlike Android =)
        And Windows Phone is more than alive, Windows Phone 8 will scare the crap out of ios (dont have anything against ios). There I fed you troll.

        • I love Android, but I’m looking forward to seeing the new Windows phone lineups… My old 6.5 was a great phone with integrated Office apps…I wouldn’t count Windows out yet.

        • Windows Phone is awesome and I am sure Windows Phone will be even better. I am a WP7.5 user myself.

        • Too bad no current handsets will be able to run WP8… you are just gonna have to settle for some of the few features they are going to incorporate into their 7.9 update… or throw ur phone out the “windows” (lol) and buy yourslef a new dual core device that supports the WP8 os…

        • Don’t see how it is any different from Android that never upgrade their phones to the new OS lol. Anyways, you are right and wrong. I will use my current handset as a secondary phone and a nice HD screen, dual core with SD Card slot WP8 device! Oh man, my mouth is watering just thinking about it!! :D

        • Dude, you really need to come back down to earth and get you a big plate of reality since your mouth is watering. My whole working career has been around Windows and I used Microsoft PDAs and phones all the way up till Froyo came out and switched. And I played with the new HTC windows phone for about a week earlier this year and it is horrible. You must be on bath salt. WP may pop up on a phone here and there, but it’s not going to gain any market. Windows Phone IS dead.

        • I could care less about iOS, and integrated or not Windows phone is about to go the way other great MS ventures as the Zune, and the KIN. Windows phone 7, 8, 9, whatever number you wanna add is dead in the water.
          Android rules.

        • Oh come on boy, you know you have a soft spot for iOS. And your mouth watered when you saw the small preview of Windows Phone 8.

        • Boy there is Windows Phone 8 on the horizon, it will fill you up pretty good =)

        • More like make one puke. How does it feel to know that your mobile OS of choice is about to be discountined. Even Nokia is talking about making Android phones now. Pretty sad for windows phone but can you blame anyone, that OS/UI is garbage.

        • oooooo, someone is getting hungry again. Well as far as I know WP is not to be discontinued, haven’t you heard of WP8? And if it’s true Nokia is going to make Androids well good, HTC, Samsung and others do the same. But if Nokia does it I doubt that they will make an impact since Samsung owns the Android market. Get it boy? Now Nokia is the one who is really dying. Don’t matter what OS they use.

        • Frank, thanks for making my point, yes Nokia is dying because it chose to make a platform that no one want “windows phone”. I’m glad you finally see it my way, Understand ones fault is the first step to improvement. Now I encourage you to look at Android more closely, And again good job.
          Android rules.

        • Haha, let me explain to you again boy. I said Nokia is going to die no matter what OS it uses. Just because I am not a fan of Nokia doesn’t mean I am not a fan of WP. Get it? ;-)
          And I will never return to Android. I tried it twice. First with the Galaxy S2, great phone crappy OS. Then with the HTC ONE X, awesome phone crappy OS. I went back to Windows Phone, Android was causing me too much frustration. iOS and WP all the way!!

      • WP8 is not out…and it’s going to be the future, but for now, I’m rocking on the Galaxy S3, which I’m loving…so in two years I’m going back to window….by the way I’m waiting for the window tablet…can’t wait, the window 8 coming and wiping the whole market, and kicking out the APPLE as back in the days…okay I’m not that old, but I grow up windows…so I have a heart for windows…

  2. First monster now HTC. BEAT_^_beat_^_beat_^_beep—————–
    Die once and for all or go make car audio hah

    • You HTC fanboys crack me up. I have the GNex and it is plety solid and not flimsy at all. Y’all really need to find a new drum to beat because that one is the biggest load of crap ever.

  3. Is this the same company (Monster Cable) that was selling $200 USB cables and tried to patent the word ‘Monster’? Fools and their money.

    • monster produced, manufactured and developed, distributed the headphones for Beats. that licensing arrangement seems to have ended. Beats is a strong recognizable conumer brand and they have licensed it to HP, Chrysler and now HTC. HP owns the IP on the audio in their computing devices, just as Monster probably owhs most of the driver and headphone IP in the headphones. Beats is a remarkable marketing machine comprised of a handful of people in an offce but with the public perception of a large electronics manufacturek when, in fact, it is a brand licensing company. HTC bought into a cooany who really holds no assets other than a brand and that brand never materialized into sales for its handhelds. i don’t imagine that it is doing much for Chrysler either

  4. The HTC One X is a great phone and if it were on Verizon I would have probably bought it over my SGSIII. It has the best screen, good proc, and a really solid feel to it.

    Unlock the bootloaders (only affects the people that care about it) and throw in larger batteries (runtime is a huge concern for the iPhone crowd that wants to switch) and I think you’re phones will do great.

  5. Well, HTC is struggling because they’ve abandoned a loyal customer base. I’ve been an HTC fan since the T-Mobile Wing. I now have the last smartphone I will ever buy from them, the HTC Rezound. This thing is crap. It has massive radio issues, and instead of addressing these and releasing the promised 4.0 upgrade, they continue to focus on new handsets they won’t be able to sell because of disenfranchised users such as myself. I used to tell everyone to buy HTC; now all I do is talk about how much I’ve come to hate them. Wake up HTC: You did this to yourselves!

    • I agreed, I was with HTC since day one also…my last phone was Evo 3D, waited for so long for the 4.0 update, nothing…I had the rooted phone, so anyways, my family all has HTC EVO 3D, we like bought them all at once, the main issue is the battery drain…and no updates…now I got me the Galaxy S3…and I’m just loving it….HTC and APPLE down down…

  6. I want to know how it is that HTC is suffering for lack of an integrated music store?

    Has this author truly never picked up an android phone? Can he possibly be THAT clueless?

    You have your choice of two main music Stores on Android, Google and Amazon, as well as a dozen smaller regional ones. You can even use several at the same time.

    Take off those apple blinders.

  7. Beats audio is a joke and a marketing ploy. So the phone has some DSP processing. BFD. I would rather them say it has some BBE processing. Then it would actually mean something.

  8. To each is own, i bought the HTC Amaze 4G and this phone is Fantastic! There is no such thing a s perfect product. You Guys grumbling about the 4.0 update know that it has been delivered. My Phone compared to My friends I phones shines over apple and is truly a embarrassment to apple. Great Job On this New HTC AMAZE phone Guys!

  9. Beats is a joke, its over equalized sound is all it is. Nothing more then what Bose does to small cone paper speakers. Just digitally adjust to make it sound artificially better. That’s not the problem with HTC not selling phones. The fact that a lot of people bought their phones and had trouble or disappointment with their phones and are not buying HTC again is most likely their problem.

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