Dr Dre, Peter Chou, Jimmy Iovine

Two years after deal first inke​d, Beats wants to buy back HTC's remaining 25 percent stake, according to The Wall Street Journal

Headphone maker Beats By Dr. Dre could be looking to end its partnership with HTC by buying back the company's remaining 25 percent stake, according to reports from The Wall Street Journal. The newspaper says it's learned from "people familiar with the matter" that Beats wants to bring in new investors to provide debt financing and take a minority ownership stake, allowing Beats to buy back HTC's share in the company. The news comes after Beats was forced to abandon a $700m refinancing deal earlier in the year that would've also allowed it to buy out HTC's share.

At the peak of its success back in mid-2011, HTC paid more than $300 million for a 50.1 percent stake in Beats. However this was reduced to a 25% share a year later, when Beats bought back half of the Taiwanese manufacturer's share. HTC has also stopped including Beats earphones with its products, instead focusing on Beats-branded software audio processing on handsets like the HTC One. The WSJ reports that differences over strategy soured the  partnership between HTC and Beats. HTC's fortunes have also declined dramatically since the deal was first inked two years ago, on account of fierce competition in the smartphone space.

For its part, Beats is reportedly looking to expand aggressively into the areas of car and home audio systems, as well as introducing a music streaming service, building upon its success in the premium headphone space. Should Beats buy back HTC's remaining stake, it's unclear how this might affect co-branded HTC devices. But it's possible it could open the door to other manufacturers releasing Beats-endorsed handsets in the long-term future.

Source: The Wall Street Journal

 

Reader comments

Beats reportedly looking to buy back HTC's stake in company

69 Comments

People that buy apple products are not idiots. Phill has a MacBook Air. Fuckface.

Posted via Android Central App using my awesome Nexus 4

People that buy Beats aren't idiots either...but people who make general comments calling groups of people idiots....

People who buy Beats products are not idiots. But rather they are grossly unimformed about why Beats are the most overpriced, overhyped and overrated headphones on the market today.

Exactly. My teen soon wants Beats desperately. I ask him why and he doesn't know. He just knows that he wants them. I tell them that they are sonically inferior. He doesn't care.

That's a sure sign of great marketing. Beats fans are almost Apple-esque in their slavish brand devotion.

My Beats Studios were a gift. I love them. They are perfect for the type of music I (mostly) listen to. Great for noise-canceling on flights too. Also own a pair of their buds. The faction of those calling Beats "overrated" is just as annoying as the faction that think they're the greatest thing since sliced bread. Most of these ppl don'town Beats or tried them once in the Apple store. Mob mentality, just want to say something sucks b/c its the popular thing to do. Anyway, I own Beats, an HTC One (which came with GREAT earbuds btw), an iPad, and a MacBook Pro...so what does that make me?

I say Beats suck because I've done A-B tests with them as well a huge number of sets. They consistently under-perform cans that are half the price.

Plus headphones should have a flat frequency response, not be tuned to certain types of music. That's what EQs are for.

Beats are tuned for a certain type of music. Mostly music with hard and High base. Urban, hip hop, rnb etc. While I do agree headphones should be able to enhance any type of music beats does a great job at what it's made for.

HTC ONE ~ Android Central App

Unless you have the Beats software, using the headsets aren't going to do a dam thing. My motorola HD stereo headset offers way better quality than my friends beats buds without the beats software

Good that you got it as gift and enjoy it. I just don't think they are remotely close to being worth the money they cost.

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Macbooks are actually decent products where as Beats headphones are over priced garbage. To be honest I have nothing but contempt for anyone who buys them.

#HOLOYOLO

Someone praising an Apple product, and in the same sentence calling something else "overpriced." LOL! You poor misguided soul. Apple is the king of "overpricing." Check the price of the inferior spec'd iPad mini with the "garbage' screen? Or how about the price of the old, dated iPod Classic...check that price lately?

All I'm saying is that I'm tired of all the hate towards one OS or the other. We have choice, and that's good. I went to my at&t store a while back, and the guys there know that I use android only, but I wanted to take a look at the iPhone 5. They gave me hell and told me that I don't need to look at the iPhone because I use Android and iOS sucks. I can use whatever the hell I want and so can anyone else. That's why I say that fanboys are idiots no matter what platform your a fanboy of.

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Oh, so ALL generalized statements suck, huh? Everyone who says that sucks.

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The hate is strong in this one. I'm pretty sure many Android users and others also buy Beats. Personally, I did my research and got Audio Technica ATH-M50 for my Mac and Klipsch S4A II for my Galaxy S III.

exactly, I would be completely fine if I never had to see a beats product again.
[and for the record same goes for apple and all their iSheep]

Wait, so because Phil is important and uses a Mac, I should toss out my Windows computers and use Macs?

I know that's not what you meant, but it's what your statement implies.

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Beats... Yet another fad that started because some famous person said it was cool. Spend less money on a Shure or Bose and get better sounding equipment. I have a pair of Skull Candy earbuds that sound just as good as any Beats I've ever put into my ears. My Apple earbuds that came FREE with my iPhone 5 sound just as good too. I'd imagine the story is the same with over-the-ear units, but I haven't tried them.

The Hollywood hype machine is alive and well...

Shure's I'll give you, but Bose, Skull Candy and Apple earbuds are crap.

My lord your head would explode if I let you listen to my Senn I-80's.

Skull Candy is average at best, but they're much, much cheaper than the other brands we're talking about here. I'd say they're pretty fairly priced for what you get.

This. I bought a pair of their headphones, for $50. For the price, they are amazing.

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Skull Candy are HORRIBLE headphones. Cmon. If someone says they are "good for the price", that tells me they really don't care how their music sounds. I owned a $40 pair of Sony earbuds that were a pair of the best sounding I've ever owned. If you're gonna be cheap, at least get good ones.

Just thought I would throw this in there... I bought a pair of Klipsh S4's, and haven't looked back.

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Listening to a podcast on S3s right now. For the money they are great: good quality and extremely comfortable.

Good comment, but Shure and Bose are not always cheaper.

People often buy products for looks, style as well as quality.

And Bose has had a reputation for being "pricey" as well as Beats by Dre.

You're all missing the point that I was trying to make. I didn't say the Skull Candy or the Apple buds sounded great. I said they sound as good as any set of Beats I've tried. I've only tried one set of Bose, and they sounded pretty good. Not as good as Shure, and certainly not as good as Klipsch, but definitely better than mediocre Beats.

My Sony MDR-V6's couldn't care less about this news. However, it's not very good news for HTC who uses Beats Audio as a draw to their devices. And look at how much better it makes the One's external speakers sound. I'm guessing they'll probably meet in the middle and Beats will allow HTC to continue to use Beats Audio in future devices if HTC agrees to sell back their 25%.

Am I correct in assuming that was a 700 million dollar refinancing deal and not $700?

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Again? They just went through this not too long ago when they bought back 25%. Why the hell did they bother selling it in the 1st place.

I'm guessing that they expected HTC to include their actual headphones with a lot more device models for a lot longer than they did. I remember thinking at the time that the deal sounded pretty savvy to me from a market expansion standpoint, but when HTC stopped including the headphones and the deal effectively turned into a software partnership, it started to look really bad really fast.

I wish I had more brains than money so i can buy stakes in $H1TTY headphone companies and sell it back 3 years later for no reason. Idiots.

Well if they bought 50.1% 2 years ago for $300M and they're selling the remaining 25% back at $700M, then they're up a minimum of $400M on the deal, plus whatever they sold the first 25% for.

The article didnt state that they sold it back at 700 mill. If I remember correctly Beats bought back 25% at the exact same price they sold it for. So no one made any money. The remaining 25% would also prob be sold back at the same amount. The article stated that Beats was going through a 700 mill refinancing deal.

Right now the non-beats headphones HTC bundled with the One are the ones I use...

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Beats sound on my One S was crap, never put it on, but the version on the One actually sounds pretty good. The headphones are like Bose's, way overpriced for mediocre sound. Maybe HTC should just license the software for future phones and sell the ownership stake.

Posted from my HTC One via Android Central App

I disabled Beats on my One S too. It did weird stuff, like if I was listening to a headset and the phone rang, Beats would be disabled (which is normal behavior I suppose) but once I got off the phone it wouldn't re-enable itself. I didn't mind the over-emphasized bass and vox ranges, but I really hated that it screwed around very heavily with overall volume, as well. Since it never re-enabled itself after the phone rang, the music would be too quiet.

Am I the only who thinks this should be a 20 second decision for HTC? Cash in exchange for stock in a company that you really no longer support?

I love Beats headphones. They look and sound great to me.. I do feel they are overpriced tho..
The only ppl who talk bad about them are on these type of sites though..

Oh trust me, those people aren't just on sites like this. They're everywhere in real life too.

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i.e. people that don't own or have never owned, Beats headphones. Its par for the course with anything that becomes popular in the mainstream. These people are also known as "haters". Beats are overpriced, ok we get it. But tell me, what should they be worth, then? The sound is damn good, and I'd challenge anyone to come up with something as technically awesome as the Beats Pill. Overpriced? Sure. But the thing blows your doors off with its sound. Great piece of audio equipment.

I think beats products look great. Their products are a bit overpriced and don't have the quality of sound as other headphones at cheaper prices but who cares? If you like em buy em. You do you! Yoloswag!

"At the peak of its success back in mid-2011"

Is this the opinion of the article author? I would argue that Beats is just as if not more popular today than back in mid 2011. Everywhere I look someone has on those signature Beats headphones these days.

It's sad that HTC is struggling. They clearly made the best phone of the year yet the laggy, gimmicky GS4 is killing it.

Goes to show you the power of marketing, something the people at HTC are to stupid to do. You get RDJ yet only post the commercial on YouTube.. I haven't seen it once on TV.

"...forced to abandon a $700 refinancing deal earlier in the year..."
Wow, for $700 I'll personally buy 25% of Beats.

I'm sure HTC would be fine without Beats, provided they get themselves out of this financial rut their in. Anyone that bought their products didnt really buy it because of Beats' name slapped on their phones! I'm a huge fan of HTC and if they can straighten out their problems they can definitely be a great contender against Samsung!

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People say many bad things about me S4 but me S4 is happy phone. My Senn HD595s and Pioneer HDJ-2000s sound actually quite good driven from my S4 directly (w/out my seperate headphone amp). I baught a pair of Beats Studios. I gave them to my teenage daughter. She actually thinks they sound good. Lol. I don't even want the Beats logo on my phone.

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