Just as things started to look up for HTC – it has a major star promoting the company in a new ad campaign, the HTC One has just launched on Verizon, and we’re expecting the HTC One Max soon – so a new rumor reminds us the company is still struggling. The news comes from a report published by the Wall Street Journal, where it’s suggested the partnership between it and Beats by Dr. Dre could be coming to an end.
Apparently, the founders of Beats Electronics want to buy out HTC’s remaining stake in the company, so it can bring on new investment partners and expand its growing range of hardware. HTC purchased a 50.1 percent controlling share in Beats in happier times, mid-2010, only to sell 25 percent back a year later for $150 million. Despite this, HTC is still the largest shareholder.
HTC made the most of the opportunity though, pushing Beats Audio first on the HTC Sensation XE and XL, before adding it to many of its top of the range phones, including the HTC One and the Windows Phone-powered HTC 8X. It hasn’t always been about the software either, as several HTC phones have come with Beats by Dr. Dre headphones included, such as the HTC Rezound.
It’s not just HTC using Beats Audio, as HP adds it to monitors, laptops, and even its HP Slate tablet. However, HP only licenses the technology, and has no financial stake in Beats.
According to the WSJ report, Beats Electronics has been actively trying to attract new investors for a while, and is apparently in the process of striking a new deal that could involve new part ownership. If it all comes through, along with some debt restructuring, we could finally see the delayed Beats streaming music service launch. It’s not clear if HTC has been approached and turned down a new deal, or if Beats thinks its time with HTC has simply run its course, but the report is hardly a vote of confidence for HTC.
As for HTC, if the offer to sell is right, we doubt it will mind the injection of cash, but Beats Audio is one of several differentiators between it and the competition, so it may decide to continue as a licensee. There’s no confirmation from Beats or HTC on the situation at the moment.