Beats By Dre looking to end partnership with HTC

By on August 19, 2013, 1:30 PM
htc, partnership, beats, beats by dre, dr dre, jimmy iovine

Beats Audio co-founders Dr. Dre and Jimmy Iovine initially sold a 50.1 percent stake in their company to handset maker HTC two years ago for $300 million only to buy half of it back a year later for $150. Now the duo are after the remaining stake as they wish to end their partnership with HTC and shack up with a new investor that can provide the funds necessary to expand Beats’ reach to other markets.

People familiar with the matter told the Wall Street Journal that Beats has ambitions to broaden their business to include speakers, car audio systems and other consumer electronics. It’s also widely known that Beats is working on their own music streaming service which is expected any day now.

The company tried to raise $700 million earlier this summer to refinance debt and buy out HTC’s stake. That idea was reportedly pitched by Iovine during a presentation to debt investors at a midtown Manhattan hotel.

Investors were said to be impressed with the company’s recent growth but there were some concerns that ultimately pulled a deal off the table. Some were worried about whether Beats’ success was simply a trend or could be replicated in other markets while others feared the aggressive terms the company was after.

The deal was revised a few weeks later in favor of investors but concerns about the Federal Reserve’s interest-rate policies let to the offer being withdrawn. Market conditions are on the rebound, however, which means Beats could revisit the idea this fall.




User Comments: 15

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cmbjive said:

"Beats Audio co-founders Dr. Dre and Jimmy Iovine initially sold a 50.1 percent stake in their company to handset maker HTC two years ago for $300 million only to buy half of it back a year later for $150."

They bought it back for only $150??!! Wow, that's a great price!

hahahanoobs hahahanoobs said:

...only to buy half of it back a year later for $150."

They bought it back for only $150??!! Wow, that's a great price!

There, read it again.

5 people like this | veLa veLa said:

Beats isn't even high quality audio.

MilwaukeeMike said:

Some were worried about whether Beats? success was simply a trend or could be replicated in other markets while others feared the aggressive terms the company was after.

I doubt it really had much to do with helping to sell smartphones. Beats supposedly makes your music sound 'better' but many smartphone users don't have headphones capable of taking advantage of it.

And they want to start a streaming music service? Isn't Spotify barely hanging on and Google just started their own service? How are they going to compete?

2 people like this | Guest said:

No real loss as beats generally resulted in poor quality sound reproduction anyway

Guest said:

Read it again.

Adhmuz Adhmuz, TechSpot Paladin, said:

Beats Audio, the Monster Cable of the audio world. "Beats Audio. LEADING THE REVOLT AGAINST INFERIOR SOUND." Funny the claims companies make. I was recently able to compare a pair of the urBeats earbuds, retail for $99, against a pair ultimate ears by Logitech, purchased for $9.99. Honestly with one bud in one ear and the Logitech in the other, the sound was so similar a blind test with a couple of my friends proved they couldn't tell the difference. The friend who bought them looked like a fool. Much like all people who buy this crap.

1 person liked this | Guest said:

Beats....LOL

Along with Monster and Bose they are extremely misleading about their quality.

Pick up a pair of Beyerdynamic DT 770s and see what real headphone bass is like.

Get some Grado SR225s to hear true clarity and crisp sound.

treetops treetops said:

I have it on my phone, it came with it, never used it, really not going to ever buy beats head phones. And my phone speaker cannot use it.

mctommy said:

Still rocking my Sony MDR-V6 which were introduced by Sony in 1985. Sony never changed these (altered them a little bit with the MDR-7506 & MDR-V600) and they were the go-to studio monitors... and they cost about $75.

1 person liked this | St1ckM4n St1ckM4n said:

Beats supposedly makes your music sound 'better' but many smartphone users don't have headphones capable of taking advantage of it.

Actually, the audio processing program you speak of is indeed made to take advantage of the 'generic' consumer headphones. The bass is boosted in a way to get 'better' sound out of earbuds or similar. Apple does the same with their iPhones.

MilwaukeeMike said:

Actually, the audio processing program you speak of is indeed made to take advantage of the 'generic' consumer headphones. The bass is boosted in a way to get 'better' sound out of earbuds or similar. Apple does the same with their iPhones.

Well.. after I read what you wrote I tried it out with my HTC One and some different headphones. My super cheap Sansa Clip earbuds, $6 panasonic earbuds from Amazon (which sound good for $6 earbuds) and my logitech computer speakers (2.1) all had the same difference. It was noticeable to turn Beats on and off, but not by much. It added some tone, increased bass slightly and made the vocals louder. There was also a bigger stereo separation between the left and right speakers. It did make the sound better, but it didn't help anymore with the cheap earbuds than it did with the logitech speakers.

However... On the speakers on the actual HTC phone, it was like turning a mono shower radio into a Bose Wave radio. Well... maybe not that much, but it sounded a lot better. I don't know if perhaps HTC doesn't do anything to improve the standard sound on a phone they include Beats on, but the difference was significant.

treetops treetops said:

I thought beats just undigitalized music

trgz said:

Oo, I was looking for a cheap/simple Android Phone for the rare occasions I might need to give my Nexus 10 some 3G and I had shortlisted the HTC Desire C but haven't yet bought it due to the Beats label on it! Here's hoping that it might get un-badged (not too worried about the sound as I have a iPods for that)

Railman said:

I have a pair of Beats earbuds which came with my HTC. I am impressed with the sound quality, but what impresses most is the fact they are still working considering the rough treatment they get. Most headphones only last 6 months!

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