HTC and Beats Electronics put the end of their partnership
HTC and Beats Electronics will take separate roads. The end of the relationship between both companies has been a subject of speculations and discussions in the mobile world for some time now. HTC owned half of Beats Electronics, but according to a recent report the company has sold its remaining stake – nearly 25% for $265 million. This is more than HTC got for the first half of its stock a year ago – $115 million. What happened between both companies? Apparently the disagreement between them related to strategy investments were growing tension. Another reason is the different paths that the companies are taking. Beats Audio is focusing on the portable speaker market. It will also develop music streaming service and work together with Pandora Media Inc.
When HTC begun its partnership with Beats, it invested nearly $300. This was nearly 2 years ago. Now we the closure of the deal, HTC is receiving nearly $415 from the selling of its stock. In numbers, the Taiwanese manufacturer has some benefits, but if we keep in mind the growth of Beats, it is actually selling at loss. This is another indicator for the uneasy relationship between both companies. For better or worse, it is a fact that HTC and Beats will no longer work together. The fresh cash flow for HTC is rather welcomed after the difficult year for the company. The sales numbers are not great for the manufacturer, despite all the efforts to encourage the sells. This might be the first quarter of the year for HTC finishing with loss since a very long time.
Not long ago, the company lost a law case begun by Nokia. The US ITC judge ruled that Taiwanese manufacturer has infringed some of the patents held by Nokia. HTC is experiencing some difficulties in supplying for HTC One mini which is certainly not helping for the sells. The “breaking-up” with Beats brings $415 million in the company which will definitely help. Beats is also happy from the deal. The company is attracting a new investor, Carlyle Group that will invest more than $1 billion.
Source: Wall Street Journal