Phones Limited

Report says Beats Audio planning to ditch HTC

News   •   Aug 19, 2013 12:02 BST

Beats Audio software is exclusively integrated into HTC’s smartphones such as the One handset. However, a report is saying that Beats is planning to ditch HTC by buying back the Taiwanese firm’s stake in Beats.

According to the Wall Street Journal, “The maker of the popular Beats by Dr. Dre headphones is looking to buy out its Asian partner and bring in a new investor that can provide it with fresh funds for growth, people familiar with the matter said.

“The moves come as the founders of Beats Electronics LLC—music mogul Jimmy Iovine and American hip-hop producer and artist Andre Young, better known as Dr. Dre—are broadening the company’s business from headphones to include speakers, audio systems in cars and consumer electronics and a soon-to-be-launched online streaming music service.”

The site adds, “The fledgling audio-products company is now in talks with an investor that could provide debt financing and possibly take a minority ownership stake in the coming weeks, the people familiar with the matter said. Beats also hopes to buy out struggling Taiwanese smartphone maker HTC Corp.’s 25% stake in the company.”

This isn’t the first time Beats bought out HTC stake in the company. WSJ says, “Two years ago, Mr. Iovine and Dr. Dre sold a 50.1% stake in Beats Electronics to HTC for around $300 million, to only a year later buy half of that back for around $150 million—a discount given Beats’ substantial growth in the intervening months.”

It adds, “Earlier this year, Beats approached HTC about selling its remaining stake, according to a person familiar with the matter.”

Do you think it’s right for Beats Audio to ditch HTC? Do you think the Taiwanese phone maker is a sinking ship? Let us know what you think through a comment.

Want to buy an HTC One Red? Get it from Phones Limited.