HTC to acquire majority stake in Dr. Dre's Beats
HTC is planning to integrate some of the Beats technology into their phones in deal worth more than $500 million, sources tell CNET.
HTC is expected to announce Thursday that it has acquired a 51 percent stake in Beats Electronics, the company that manufacturers the Beats by Dr. Dre headphones and loudspeakers, sources close to the talks told CNET today.
HTC, a maker of popular smartphones, will obtain the majority stake in Beats Electronics at a cost of more than $500 million, the sources said. The Beats headphones has emerged as a player in higher performance audio and more importantly become a status symbol among music fans and the country's youth.
Dow Jones and All Things Digital were first to report the agreement.
HTC is expected to integrate the Beats sound system into their phones, the sources said. The phone maker is expected to allow Beats Electronics to continue operating autonomously.
Beats Electronics was developed by Dr. Dre, a powerful force in rap as a performer and producer, who is now turning into a consumer-electronics magnate. The company is controlled by Dr. Dre and Jimmy Iovine, chairman of Interscope records. Universal Music Group, the largest of the top four record labels, owns a small minority share.
HTC representatives were not immediately available to comment.
Update August 11 at 7:31 a.m. PT: HTC overnight officially announced its strategic partnership with Beats Electronics, but did not at the time specify any financial stake.
"The HTC and Beats by Dr. Dre partnership is an opportunity for two world-class companies to redefine the smartphone industry and define the future," Iovine said in a statement. "For Beats by Dr. Dre, this represents a critical step in our continued mission to clean up the destruction of audio caused by the digital revolution and reengineer how sound is delivered, so the consumer feels the music the way that the artist intended."
See also this ZDNet post:
HTC's delusional Beats Electronics deal: $300 million case of Apple envy