HTC acquired a majority stake in Beats Electronics for $300 million last year, as part of a strategic partnership which involved HTC integrating Beats audio technology into its smartphones. Since then, HTC has launched a number of Beats enabled smartphones, not many of which have been very successful. However, it seems that Beats has bought back nearly 25% of its total shares from HTC for around $150 million.
Following the share buyback, Beats now owns around 75% of its total shares while HTC remains the largest external shareholder with a 25% stake.
HTC will continue to have exclusive rights to use Beats audio technology in its phones.
Here’s the official statement:
“HTC and Beats today announced a realignment of their business agreement that provides Beats with more flexibility for global expansion while maintaining HTC’s major stake and commercial exclusivity in mobile.
Under the terms of the agreement, the founding members of Beats will buy back 25% of its total shares for a total of approximately 75% ownership, with HTC remaining the largest outside shareholder with approximately 25%.
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. HTC and Beats will continue to work closely, including a joint global marketing campaign later this year.”
This could be beneficial for both HTC and Beats, as it doesn’t impact HTC’s technology deal much and gives it some cash back, but also provides Beats with the flexibility to expand internationally.
Last year, HTC announced its partnership with Beats, and stated that from now on it handsets will come with Beats audio technology inbuilt. A part of this deal also included Beats branded headphones or earphones being bundled in premium HTC handsets like the Sensation XE and XL.
However, HTC has indicated to the folks over at CNET that from now on the Taiwanese handset maker will not be bundling Beats branded headphones with its handsets. This decision should not come as a surprise since Beats and Monster, the company which manufacturers the Beats branded earphones and headphones, recently parted ways.
Quality music has been playing a very important part in recent handsets from HTC, with its One series of handsets coming with an ‘authentic sound’. Sadly, the sound quality of these Beats branded handsets from HTC is not that good as the marketing will lead you to believe. Instead of using a capable music chip in their handsets, HTC uses some SQ and EQ enhancements to achieve a simple ‘Bass Boost’ effect when the user enables the Beats audio effect in his handset. Some previous gen phones like the Galaxy S, Nexus S and even the Galaxy Nexus have a better sound quality than the Beats branded handsets from HTC.
Well it looks as if the Runnymede 2 will be one of the many devices that HTC will be pushing featuring ‘Beats by Dre’. The partnership, which was announced in the beginning of August, is shaping up to be much more than HTC simply slapping a pair of earphones and ‘Beats’ stickers into a box.While the Runnymede 2 is purported to ship with a set of over-the-ear headphones, it will also be powered by “SRS surround sound with acoustic performance tuned by Beats”. In addition to local storage of 16GB or 32GB, the Runnymede 2 will have access to HTC Listen, which is an on-device digital download store with access to movies and music. According to the leaked documentation, the Runnymede 2 continues the Android tradition of equipping a Qualcomm Snapdragon – clocked at 1.5GHz. A large 4.7″ 800×480 and 1.3 megapixel camera sit on the front of the single-slab aluminum phone.
Pricing for the Runnymede 2 hovers around the regular £499/599 mark for the 16/32GB models, both of which include the iconic Beats Solo headset. Although the Runnymede 2 seems to be a regular phone in HTC’s timeline, the Taiwanese company is taking the initiative and branding the new device with Beats. HTC’s ‘Beats by Dre’ product marketing will hopefully serve as clear differentiator when it comes to selecting an Android-powered phone, which some see to be a serious issue.
Although you might have heard about “Beats Audio” thanks to the HP Touchpad, feel free to unlearn that correlation. It looks as if Hewlett-Packard has missed their chance to really let their devices stand out in the mobile space, as news that HTC and Beats Electronics have officially announced a partnership in efforts to ‘redefine the smart phone category and redefine the way sound is heard‘.
If you’re questioning this and are concerned that it sounds too good to be true, you might be on to something. Beats by Dr. Dre is manufactured and distributed exclusively under license to Monster Cables. Yes, Monster Cables, the same company that produces audio and video cables that sell for a exorbitant mark-up price because they can.
As posted on the “Beats by Dr. Dre” blog and reported by AllThingsD, the partnership is an attempt to redefine the sound on smartphones and mobile devices. HTC will be able to use the brand as a huge key differentiator in the battle for victory in the smartphone race, as it’s one of the major issues that OEMs are having when deploying new devices and marketing to users — answering the question of “what makes our phone different?”. HTC can market a premium sound experience by leveraging the current success of Beats by Dr. Dre in popular culture.
The obligatory article pun? The partnership is to the tune of 300 million dollars.