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HTC has been the biggest investor in Beats Electronics for over two years now, but the relationship between the owners and the investor has struggled, especially in the past year with HTCs profits falling and its smartphone line shrinking.
With HTC still retaining an exclusive license to use Beats Audio in their smartphones, it has made Beats Electronics move into the smartphone world stagnated until this exclusivity wares off and the only way around this seems to be Beats buying back its stake.
The company, run by music mogul Jimmy Iovine and American hip-hop producer Dr. Dre, has met with an investor who may be able to settle their troubles and offer some financial aid to push the Beats brand into other markets.
Recently, Beats Electronics bought MOG, a music streaming service, to expand into the software business. Beats already has 59% of the US market for premium headsets costing over $99. With the new move into portable speakers and audio, they could be branching out into all music markets.
To do this, Beats needs money and stable funding, two things HTC cannot deliver at the moment. Beats is looking a little shaky itself, posting some less than impressive stats for recent revenue and profit. The company is looking for an investor to pay off some debt, as well as the HTC stake.
Once HTC loses the exclusivity, Beats Audio may make its way to Samsung, LG, Nokia and perhaps even Apple, although we doubt the latter considering Apple loves to do everything on their own. HTC has dropped significantly in the pile, going from the second largest seller in the US to the fourth.
The HTC One, with Beats Audio, has done well with almost 10 million sales. Samsung is still overturning them with over 20 million Galaxy S4 sales and the Galaxy S4 Active and Zoom both on the market for different users.
It is hard to see HTC crawling back up the ladder anytime soon and if Beats Electronics wants to stay on top in the music industry, they may need a new investor with big savings and a warm heart to Dr Dre.