Beats Electronics said to be interested in buying out HTC's stake in its companyAlex Wagner - Editorial Director of News and Content
HTC smartphones have come with many different designs and sizes over the years, but one thing that most of them have had in common since late 2011 is a Beats Audio tattoo on their lower back. That's a result of an investment made by HTC in Beats Electronics that gave it a 50 percent stake in the company. Two years after the pair got together, though, Beats may be looking to drop HTC.
A new report from the Wall Street Journal claims that Beats Electronics is interested in buying out HTC's stake in its company, which currently sits at 25 percent after Beats bought back 25 percent of HTC's share in 2012. Beats is said to be looking for a new investor that can supply it with more cash so that it can continue to grow and expand its product lineup to include speakers and other electronics. The company is reportedly holding talks with an investor that could provide it with debt financing and take over a minority stake in Beats.
The Beats-HTC partnership originally saw many HTC smartphones bundled with high-end Beats headphones, but HTC recently put an end to that and has instead focused on building Beats audio software into its handsets. One source of today's report claims that HTC originally saw its Beats partnership as a way to attract young customers, but the relationship between the two companies is said to have gotten a bit rocky lately due to differences in strategy. Beats reportedly asked HTC about selling its minority stake earlier in 2013.
While the included Beats headphones may have helped HTC to move a few extra handsets early on the partnership, its deal with Beats Electronics doesn't appear to have helped to catapult HTC to smartphone market domination. It's not clear whether or not HTC will ultimately decide to sell its remaining stake in Beats Electronics, but it'd be interesting to see what kind of relationship would remain between Beats and HTC if Dr. Dre and Co. are able to buy out HTC's share. Do you use the Beats Audio software installed on HTC's smartphones?