Beats by Dre Supposedly Looking to End HTC Partnership

Discussion in 'Android News' started by dgstorm, Aug 19, 2013.

  1. dgstorm

    dgstorm Editor in Chief
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    According to a report in the Wall Street Journal, the Beats by Dr. Dre Company may be planning to dump HTC. If you remember way back in 2011, HTC actually actually bought a 50.1% stake in the company. Then in 2012, when things started really going downhill for HTC, Beats by Dre purchased 25% of the company back from HTC. As it turns out, as bad as things have been going for HTC, the opposite has been true for Beats by Dre. They have grown their business from $200 Million in revenue in 2010 to $1 Billion in 2012. Beats by Dre now holds about 59% of the US premium headphone market.

    It looks like Beats by Dre now wants to find a better partner, one that matches its success. To do that, they would have to purchase back their 25% stake at quite a bit more than the original $150 Million it was previously valued at. Still, it is something they can likely afford, and the cash would likely be more valuable to HTC right now than the partnership.

    For now this is just "insider intel," but it will be interesting to see how this drama unfolds. The question remains, "Was this partnership ever worthwhile for either company from the get go?"

    Source: AndroidPolice
     
  2. jspradling7

    jspradling7 Active Member

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    I wonder who they want to partner up with now. Googerola?
     
  3. dezymond

    dezymond Tech Support Mod
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    Now is it going to be Moto or Sammy? Either way I think it's a smarter move by Dre.
     
  4. pc747

    pc747 Administrator
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    Think HTC and Beats were looking to try and capitalize on the urban market, the people who appeal most to the beats brand. Just look at one of the first commercials they put out.

    The reality is that they didnt advertise strong enough in that area and HTC is not going to just advertise a phone to one area plus I think HTC struggled with trying to find their identity. This partnership could have been a stronger partnership but neither wanted to put in the leg work to truly capitalize off it and as a result they are not truly getting in the revenue to reflect that. Though I will say that Beats should hold off trying to jump the ship as people are starting to gravitate to the htc one and the beats brand is starting to slowly reach the urban market. HTC needs to put out another successful HTC one "like" device and push advertisement in to key movies and music videos.
     
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  5. johnomaz

    johnomaz Silver Member

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    Beats Audio is just an EQ. Its been shown that products with Beats built in tend to have a very flat normal EQ and then an EQ with the highs and lows boosted up quite a bit. They intentionally make the sound with beats turned off sound bad so theirs sounds better no matter what. Its just a gimmick and has been put in ROMs already since its just an EQ. No real big loss.
     
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  6. dezymond

    dezymond Tech Support Mod
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    The average consumer doesn't know this. They see the Beats name and associate it with high quality, again this is the average consumer. Audiophiles and phone savvy consumers know that Beats is just an EQ or that there are other higher quality lesser known brands out there.
     
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  7. kodiak799

    kodiak799 Gold Member

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    Yeah, but what about those uncomfortable headphones that wouldn't fit in your ear that came with the Rezound? Didn't think about that did ya! :)
     
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  8. MissionImprobable

    MissionImprobable Silver Member

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    It's all about marketing. HTC failed here. I run into so many people who buy into the Beats hype and think they're getting good audio quality. Not to mention knowing that the over-the-ear sets are poorly designed and definitely prone to breaking. Regardless, people buy them and HTC had a marketable gimmick that they failed to capitalize on.

    That said, who needs their horrid EQ? On-board mixing FTW!
     
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  9. dezymond

    dezymond Tech Support Mod
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    Same principle, those were Beats earbuds right? Sure those things were probably prone to breaking, but it's assumed that "hey they're Beats so they must be built well".

    The general consumer sees Beats as a high quality brand. What they don't know without researching is that there are lesser known brands and less expensive brands that have the same sound quality, and many better, than Beats. Beats is sought after because of marketing. Kids see their favorite artists supporting Beats and in turn they want to support it. Ask any audiophile, and I can almost guarantee you they think Beats is way overrated and highly overpriced.
     
  10. pc747

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    Exactly. Place the phone in the right music video or movie and they have a market. HTC the past few years seem to have no direction and the products showed that.
     
  11. kodiak799

    kodiak799 Gold Member

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    Marginally better sound than my Sony BT earbuds that I paid $100 for 4 years ago. But the Beats fit was terrible, wouldn't stay in my ear unless I wedged them in there in an uncomfortable way, and then if I moved around a little they'd come loose and fall out again.

    Still, to have gotten those Beats earbuds for free must have cost HTC an extra $50 per Rezound that they struggled to sell because of poor marketing, anyway. Why can't HTC make money? Well the Beats deal is a good example, and then they paid Robert Downey Jr. $10M to make commercials.
     
  12. pc747

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    Had a rezound and those earbuds might as well been skull candies with the beats logo on it. Compared to the actual beats earbuds you could tell they were no where near being beats quality. People were dubbed (including me at first) thinking they got a $100 pair of "quality" ear buds when the only thing they got that was quality (or somewhat) was the beats pouch the earbuds came in. They basically took a bottle of evian (aka naive) and put tap water in it and handed to us and we gladly paid the price for it.