Beats Reportedly Looking To End HTC Partnership
The known headphone maker Beats is reportedly attempting to buy back HTC’s 25 percent stake in the company. As per the Wall Street Journal’s report, Beats is looking to bring in a new investor to provide “fresh funds for growth,” and plans on buying back HTC’s stake at the same time. Although HTC bought a $300 million, 50.1 percent stake in Beats back in 2011, the headphone maker paid $150 million to take half of that stake back last year.
HTC’s quarterly sales have dropped below the US$4 billion mark since the fourth quarter of 2011, as it got squeezed in both the high and low end of the pricing spectrum globally. The Taiwanese company flagged earlier that it may post its first-ever operating loss in the current quarter.
The two companies had different fortunes over the past few years. Beats’ revenue was reportedly “roughly $1 billion” last year, up five times from 2010, and in June statisticians at NPD claimed Beats had 59 percent of the US market for premium headphones. In contrast, HTC has crashed to quarter upon quarter of dwindling profits, although the company believes it will return to form towards the end of this financial year. All of HTC’s high-end handsets are branded with the Beats logo and claim to have enhanced sound thanks to Beats integration. It’s not clear what would happen to the two companies’ branding partnership should Beats be successful in severing its financial ties with HTC, we will have to wait and see.
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