HTC announced a strategic partnership and investment with Beats Electronics, the company behind Beats by Dr. Dre, back in 2011. Since then, most HTC smartphones have come with Beats Audio, a feature that HTC used to distinguish its devices from the competition. That partnership may be coming to an end though as The Wall Street Journal reports that Beats Electronics LLC is looking to buy out HTC to bring in a new investor with deeper pockets. The move would allow the company to expand its offerings to include speakers, car audio systems and even a music streaming service.
HTC spent US$300 million to buy what was originally a 50.1 percent stake in Beats Electronics. It later sold half back to company founders Jimmy Iovine and Dr. Dre (also known as Andre Young) for about US$150 million, leaving it with a 25% stake today.
While the benefit of Beats Audio branding for HTC remains debatable, Beats Electronics has established itself as the leader in premium headphones. Revenues hit about US$1 billion last year up from less than US$200 million in 2010.
Beats also partners with HP which offers Beats Audio on some of its PCs and monitors. It also partners with Italian car manufacturer Fiat (which also owns Chrysler) and offers in-car audio for the Fiat 500 and Chrysler 300S among others.
Beats Electronics is reportedly already in talks with an unnamed investor who would not only provide debt financing but also possibly take a minority stake. Could HP which is now moving once more into mobile devices, or Fiat be that mysterious partner?
Source : The Wall Street Journal