HTC Acquires Majority Stake in Beats Audio for $300 Million - The UpStream

HTC Acquires Majority Stake in Beats Audio for $300 Million

posted Sunday Aug 14, 2011 by Nicholas DiMeo

HTC Acquires Majority Stake in Beats Audio for $300 Million

A lot of people are writing this off, but I think this raises a lot of questions for all parties involved. This week, HTC has acquired a majority stake in Beats Electronics. Listeners and readers of our content will know that Beats Audio has been not only a headphone/earbud solution, but also a huge 24-bit digital technology enhancement that can, as of right now, only be found in HP machines, HP Touchpads and HP Pre3 as well as Chrysler cars.

Now that HTC has a huge stake in the company, should we expect to see Beats integrated more smartphones? HTC has said that it's paid $300 million for this acquisition, so we'd sure hope so.

Want more on this awesome news? We have the coverage after the break.

HTC's Chief Executive Peter Chou and Beats Chairman and Interscope Records head Jimmy Iovine had a meeting of the minds when they realized that they wanted to put Beats into more smartphones than just the elusive Pre3. Granted, for most consumers, sound quality isn't a huge deal to them over price, size, ease-of-use and the like, but with more and more devices touting the ability to "do everything" with them, wouldn't enjoying music to its fullest potential be something to consider?

Some analysts are skeptical, like Gartner's Hugues de la Vergne.

Although audio quality does need to be improved in mobile devices, it will be difficult to make it a core differentiator to the mass market. Most consumers are more interested in display quality than audio.

However, Jimmy Iovine sees things a little bit differently.

When we started Beats, everyone told us headphones were a commodity. What we were told was this new generation didn't care about sound.

Clearly, he was right. Beats headphones have been seen all over the place. From celebrities, to professional athletes to the latte-sippers, it seems everywhere you go, Beats is something people are talking about, or at least listening to. Iovine says he looks to show that the industry is wrong about this move with HTC and within three months, the companies look to upgrade sound reproduction in their smartphones.

Now, how does this affect HP and their movement with Beats Audio? HP's deal with Beats in their devices will not change, however Chou did mention that acquiring a huge stake in a company like this will enhance their relationship and separate them from the pack.

I think this partnership is viewed on a core belief that amazing audio is the key to mobile phone experience. We think this is a very good opportunity to continue to differentiate.

Iovine isn't looking to take over an entire industry with this, either. He sees this deal as a way to further improve audio and the way music should sound, and bring the fun of listening to music anywhere you are back to the phone, saying that, "We're on a mission to fix digital sounds everywhere."

Within three months, I hope that we see good things coming out of the HTC and Beats partnership. Do you have an HTC phone? Would you rather it have better sound quality? Tell us about it in the comments.


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