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HTC Feels the Beats for $300M

High Tech Computer Corp. (HTC) (Taiwan: 2498) is pouring $300 million into Dr. Dre's headphone company Beats Electronics to improve the audio on its phones.

Through a strategic partnership, HTC will integrate Beats' audio technology throughout its line of HTC devices, not just headphones, starting this fall.

HTC CEO Peter Chou, speaking on a press call Thursday, described the partnership as "special" and "exclusive" to HTC phones, but Beats will continue to work with its other partners including HTC competitor HP Inc. (NYSE: HPQ). Jimmy Iovine, Beats' chairman and record producer, also promised "massive sound upgrades" from "huge computer companies" soon.

Dre is hardly the first producer-cum-musician to dive into the mobile business. Thomas Dolby, the hyperactive '80s pop star, founded ringtone firm Beatnik Inc. in 1993. (See Here Come the Warm Phones and Beatnik Releases Ringtones.)

Why this matters
Mobile audio quality is attracting interest as more high-definition content comes to mobile devices and smartphones double as music players. Handset makers are thinking about how to bring the listening experience on par with the viewing one.

For HTC, Beats is the latest investment it has made to differentiate its smartphones from its Android competitors, and audio appears to be a particular focus. The handset maker also works with SRS Labs Inc. (NASDAQ: SRSL) to bring surround-sound audio to its mobile apps and games. (See HTC Buy Shores Up Patent Defenses and HTC Buys a Patent Power Play.)

Dr. Dre's company should also help HTC attract the youth market, as well as retail customers through a partnership with Best Buy.

For more
The music industry is counting on mobile to help revive it. Here's more on how the market is shaping up.

— Sarah Reedy, Senior Reporter, Light Reading Mobile

COMMENTS Add Comment
sarahthomas1011 12/5/2012 | 4:56:26 PM
re: HTC Feels the Beats for $300M

CNET has an article suggesting that audio won't be a differentiator for HTC and consumers don't care about audio quality. I disagree. This used to be the case, but I think that's starting to change as mobile music becomes more popular. It's not as obvious of a differentiator, but sound quality could use improving on mobile.

Plus, Dr. Dre still has the cool effect working for him, right?

DCITDave 12/5/2012 | 4:56:24 PM
re: HTC Feels the Beats for $300M

Not my chances, but point taken.

And PC Mag is still called PC Mag. They're dangerously close to CableFAX-like irrelevancy, aren't they?

DCITDave 12/5/2012 | 4:56:24 PM
re: HTC Feels the Beats for $300M

The CNET missed a key point: Dre is a lifestyle brand now. Every pro athlete in every major sport wears a pair of Dre headphones walking to and from games. While consumers may not be able to tell the difference between great and good audio on a phone, they will buy whatever Dre puts his name on.


sarahthomas1011 12/5/2012 | 4:56:24 PM
re: HTC Feels the Beats for $300M

Agreed. Beats has street cred and, PC Mag says, increases your chances of getting laid.

Jeff Baumgartner 12/5/2012 | 4:56:23 PM
re: HTC Feels the Beats for $300M

Heh, but I wonder how many subscribers still get it via its namesake anymore... many of them were opting for the electronic version even back when I was there many moons ago. The original distribution method used is a dinosaur, of course, but I suppose there's something to be said about the value of brand equity, so I don't blame anyone there for keeping the name...it's a highly recognizible brand in the industry and people still depend on it.  JB


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