Struggling Taiwanese Smartphone manufacturer HTC is finding itself with less friends, according to a Wall Street Journal report that says the manufacturer of Beats by Dr. Dre headphones wants to buy out HTC’s 25 percent stake in the company.
The founders of Beats Electronics – music mogul Jimmy Iovine and American hip-hop producer and artist Andre Young, better known as Dr. Dre — are looking to expand their business into speakers, audio systems in cars, consumer electronics and an online streaming music service that could soon be launched.
It is now in talks with an investor that could help finance its plans and maybe take a minority ownership stake in the coming weeks, the WSJ cited people familiar with the matter as saying.
HTC has included audio software from Beats into one of its lines of phones, and bundled other phones with Beats headphones.
While HTC originally saw Beats as a way to court the youth market, the collaboration ended up souring with differences in opinion on strategy, said a person with knowledge of the partnership.
Earlier this year, Beats approached HTC about selling its remaining stake, according to a person familiar with the matter.
If Beats successfully expands its electronics business beyond headphones, it will further validate a widely quoted exhortation Mr. Iovine gave Dr. Dre when the rap star was deciding between signing a footwear endorsement deal or starting Beats: “F— sneakers, let’s make speakers.”
Credit : WSJ