HTC and Beats’ partnership comes to an end, Beats finds another investor

By Darshik Jariwala - September, 27th 2013

HTC’s famous partnership with Beats Electronics finally comes to an end. Beats bought back the remaining stake that HTC had in it.

The partnership began back in 2011 when HTC invested $300 million, a roughly 50 percent of stake, in Beats Electronics which led to HTC manufacturing its products consisting Beats’ speakers. However, Beats audio didn’t help boost HTC sales in any way either company expected. HTC did not succeed in luring customers and kept getting trumped by the likes of Apple and Samsung.

In less than a year after the partnership began. Beats Electronics bought back 25 percent of the stake for $150 million. In spite of which HTC still had the exclusive rights to use Beats’ audio in its products.

And today, HTC sold off the remaining stake to Beats Electronics for $256 million. The company (HTC) is already at the lowest phase of its career, and if the rumors are anything to go by, it is going to report its First ever quarterly loss in its history. Although HTC still maintains that’s Beats will still be an “Important Partner”, it refused to divulge further details as to how it plans to work with Beats in future. Moreover, they also did not provide any reason for ending this partnership and neither did it provide any statement on how this deal will impact the current financial position they are in at the moment.

While HTC is tackling its financial issues, Beats Electronics has already found another investor in Carlyle Group, an asset management firm, who is investing $500 million in the company. About the deal, Beats’ CEO and Co-Founder Mr. Jimmy Iovine says, “These transactions represent the evolution of the financial strength and significant growth prospects of Beats,”. Carlyle group too is optimistic about the deal, Sandra Horbach, Carlyle Group’s head of consumer and retail says, “We are confident that Beats will continue to drive innovation and growth in the premium audio accessory market, particularly as the proliferation of smart phones and tablets stimulate increased consumption of digital media,”

HTC, formerly known as High Tech Computer Corp., is Taiwan based company founded in 1997. It was one of the few companies then, to manufacture Touchscreen phones and PDA’s consisting Windows Mobile Operating System. The company’s market share quickly started falling once the Smartphone industry started getting dominated by Apple and Samsung.

Beats Electronics is a California based company founded 2006. The company became famous thanks to one of its Co-Founders Andre Young, more commonly known as the famous Rapper “Dr. Dre”. However, over the years Beats has grown tremendously and has a large prominent fan base and is known to make one of the best products in their line work. Beats’ products include Headphones, Earphones, Speakers, Car Audio and is currently working on its Online Music streaming service as well.

Via – VentureBeat

Source – NASDAQ ; NYTimes

Photo Credit – Anton Ong/Flickr