Beats Reportedly Looking to Ditch HTC for New Investor
Beats Electronics, maker of the popular Beats by Dr. Dre headphones, is looking to drop its partnership with HTC, according to a report by the Wall Street Journal (via TechCrunch). Sources indicate that Beats intends on bringing in a new investor as the company works to expand its product offerings to include audio systems in automobiles and additional consumer electronics, in addition to its own streaming music service.
In 2011, HTC purchased a 50.1 percent majority stake in Beats, which led to audio-enhanced smartphones bearing the Beats name and logo, as well as bundled headphones, for a period of time. About a year later, HTC sold back half of its stake to Beats, which is said to have resulted in a $4.8 billion net loss for the smartphone manufacturer. HTC has been struggling in the smartphone industry as of lately, losing considerable market share to Samsung. The company hopes to rejuvenate its presence with a new ad campaign starring Robert Downey Jr. alongside its impressive HTC One smartphone.
Beats Electronics, on the other hand, has experienced notable growth over the recent years. Beats' revenue is reported to have reached around $1 billion in 2012, and this past June NPD reported that the company's products accounted for 59 percent of the premium headphone market — a segment that grew 18 percent over the previous year.