HTC Cuts Back Beats Investment
A year after putting $300 million into audio company Beats Electronics, best known for its high-end headphones, HTC has had a change of heart. The smartphone maker has sold back half its stake in Beats for $150 million, but will still own 25 percent of the company.
An HTC press release asserts that “over the last year, HTC and Beats have made great progress in sound innovation, product integration and brand awareness with successes like the HTC One,” but doesn’t explain the decision to reduce its stake.
HTC will retain exclusive rights to use Beats audio technology with its handsets (the company has a separate deal with Hewlett-Packard for laptops); the two companies are supposed to launch a “global marketing campaign” later this year.
HTC says it expects to lose $4.9 million on its Beats investment, based on the headphone company’s current book value.