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HTC and Beats call it quits

Still H.T.C
Fri Sep 27 2013, 12:55
htc-and-dr-dre-beats-audio

IT LOOKS LIKE the rumours were true, as HTC announced today that its partnership with Beats has come to an end.

In a note to investors, HTC said that Beats Electronics has bought back the firm's 25 percent stake in its headphone company for $265m, bringing an end to the companies' two year partnership. HTC had originally taken a 51 percent stake in Beats for $300m, with Beats buying back 25 percent of its shares one year into the not so fruitful partnership.

This news follows speculation that Beats wanted out of the HTC partnership to fund its expansion in the consumer electronics market, and likely means that upcoming HTC smartphones, such as the rumoured HTC One Max, won't come with Beats Audio technology or with the firm's logo emblazoned on the back.

HTC didn't explain why the two firms have decided to call it quits, but said that it will "continue to partner [with Beats] as future opportunities arise".

However, we're going to assume that the partnership ending was prompted by HTC's failure to make much of an impact on the smartphone market, as the firm continues to struggle to compete against Apple, Samsung, and most recently, Sony. Since 2011, the firm's share price has fallen 90 percent, and the firm posted its first ever loss in the second quarter this year. 

Conversely, Beats' revenue has been strong and the firm continues to dominate the headphone market in the US, claiming 59 percent of the market for premium headphones in the country.

HTC has yet to comment further. µ

 

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