Beats said to be looking to buy remaining shares back from HTC, but will it change anything?

It looks like we’re coming up on another “it’s not you, it’s me” situation for Beats. When HTC originally bought up 50.1% of the company’s shares, it wasn’t long before the company sold 25% back to Beats (for a reported $150 million). HTC still remained a majority external stakeholder, and continued to market their phones with Beats branding.

It looks like HTC might be boxed out altogether if the latest reports from the Wall Street Journal are to be believed. The publication claims Beats is planning to buy back a majority of the shares HTC still controls, effectively boxing out any outside influence.

htc-rezound-beats-audio

Beats was making under a quarter million dollars annually when HTC bought half the shares back in 2011, but the company has since ballooned into a billion dollar cash machine. Strong performance in the consumer electronics space thanks to endorsements from all sorts of celebrities and athletes helped the company sell their “premium” headphones without issue.

But it sounds like Beats wants to expand to other areas, including vehicle audio and home theater. This move would allow them to do that without having to worry about any commitments to HTC in the future. With that, it sounds like HTC could be poised to make quite the profit on their early investment, so it’s not outside the realm of possibility to see HTC agreeing to sell back their shares.

So what would this mean for HTC?¬†Well, it doesn’t necessarily have to change anything. HTC could simply agree to a deal under the condition that they retain exclusive rights for Beats branding / technology in the smartphone space. After all, that’s all HTC really wanted out of Beats in the first place — the company stopped offering Beats earbuds packaged with their smartphones quite some time ago.

htc-beats-by-dr-dre-peter-chou

Still, such a deal would cause a slight degree of uncertainty for HTC in the future. Any exclusive deal HTC could conjure up after the sale will naturally have a time limit, and once that time limit expires you have to know Beats will consider licensing their “technology” and branding out to more than just one OEM. That hasn’t been a problem for HP in the PC space or Chrysler in automobiles, but the possibility must always be considered.

Beats Audio in smartphones has gained the reputation of being little more than a glorified equalizer. While that may be true, the typical consumer will be swayed by seeing that logo on the back of HTC’s smartphones regardless. Should this rumor turn out to be true it will be interesting to see just how things turn out for both parties involved.

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  • Butters619

    Beats audio on HTC phones is just a gimmick. It only sounds good with earbuds in, but connected to any decent stereo the beats muddies the mids and distorts the low end. Actually the majority of beats products are just overpriced gimmicks, except perhaps the first generation Beatbox (originally made with Monster) that was actually quite impressive.

    • AndreKP2124

      That’s why my Beatbox sounds good…

      • Butters619

        I said in my post that the Beatbox sounds good…..

        • AndreKP2124

          I just have a question: Is there any product that is similar to the Beatbox and is better than it?

          • Butters619

            You used to be able to get the Beatbox for around $200 during black friday/xmas and honestly at that price point I don’t think there was a better small all in one system.

          • AndreKP2124

            Well… I got that product this year for $45 on a flea market… And it works good…

    • DavidVarghese

      Beats headphones are overpriced gimmicks.

      But the software value it has is actually decent, and it even adds some hardware features to HTC devices that has Beats. Stuff like a dedicated amplifier and white noise reduction (by using plastic instead of any sort of metal for the headphone jack) are definitely welcome. I also like what Beats has done with the eq levels for the equalizer. Sure, you can get a better eq at the play store, but I find my self going with a similar sound to what Beats had (sounds really good in my car… Lol).

      • Butters619

        I personally own a One X and like I said the beats software is only usefull with earbuds. Connect a HTC beats device to any decent system (house or car) and the software changes to the audio become extremely evident and not in a good way. The beats EQ settings are high schooler setting. Cranked up lows, cranked up highs, and pulled down mids. It’s the “I want everybody to hear my music even though it sounds like garbage” settings.

        One thing you’ll notice is with beats enabled the music is substantially louder, but when this is done the audio becomes really distorted. The lows become blow out and the mids become mashed together.

        • DavidVarghese

          It does crank up the highs/lows and lower the mids, but I disagree with you with it lowering the quality of music through (eg) a car stereo. I guess it’s my preference when it comes to sound; it gives more crispness and actually doesn’t muffle the sound. But it’s a good thing you can disable it and use a different equalizer from the Play Store.

          I still like the fact that it has its own amplifier, which is good for high end headphones.

          • Butters619

            It make make the highs a bit more crisp (or piercing) but it just destroys the mids and distorts the bass. For headphones (and possibly lower powered car audio setups) this may sound better than the stock sound, but I’ll explain my case.

            I have two amps in my car (one for the sub, one for the 4 channels). I can crank the bass up so loud you can feel the pressure in your chest and it feels like I’m going to pop a window out. So it’s not like my system can’t handle it. But when you have two amps, any audio distortion is also amplified and extremely obvious. With beats on, the bass sounds like it’s coming from a cheap sub connected to an overpowering amp. And the mids become lackluster and lost. With beats off, the audio signal coming into my system has a relatively flat EQ (albeit a bit low on the volume I will admit) and my system can crank it to high volume without distortion.

            And the same applies to my home audio setup, which cost significantly more than my car setup. With beats off, the eq is relatively flat and my system can crank it so you can hear the music a block away (although again the incoming audio is a bit low). With beats on, the distortion becomes obvious at even low volumes and at high volumes it’s unbearable.

          • DavidVarghese

            I can see where you’re coming from, but you would have to adjust for the high bass from Beats on your audio system(s) to counter the distortion; turn down lows, raise mid-low slightly, raise highs a little.

            My car is stock when it comes to audio (450 watts), but it still sounds good with Beats on. However, I can replicate/make better the sound with Poweramp, so Beats is very well replaceable. But I still like the fact that it has a dedicated amplifier… Sounds really nice with my Audio Technica ATH-M50’s.

            If HTC does drop the Beats (lol I had to), I hope they find a way to add a dedicated amplifier without breaching Beat’s technological patent.

          • Butters619

            Even if I turn the bass down the distortion is there. It’s not just loud bass that is then pushed up more by my amp. It is distorted bass coming in, so no matter what you do it will be distorted going back out. The idea for sound systems is you want the audio coming in to be as flat (EQ wise) as possible. Any pre-eq or distortion will be amplified.

            On a second note, would you rather have a software add-on meant to increase phone sales messing with your EQ or a $700 head unit messing with your EQ settings?

            And yeah I can make a much better sounds with poweramp, but even then in the car I leave all the eq settings flat for the reason I mentioned just above.

    • malcmilli

      ear-buds being in would be the majority of most users usage? I’m not saying beats audio is better than other software enhancements, but my music/movies in particular definitely benefited from beats audio being on than they did from it being off. And I wish my Nexus 4 had it.

      I used to actually be able to hear dialogue in a movie when the subway was passing by.

      • Butters619

        One thing beats does is increase the volume substantially. With headphones, and especially with headphones in a loud public area, this is usually welcomed. However, if you connect that output to any decent audio setup, you will be able to easily hear some serious distortion.

        • malcmilli

          yes i understand, but i do miss that volume boost

          • Butters619

            Yeah without the volume boost HTC devices seem too quiet.

          • Mike D

            I love Beats on my One tbh. Does a whole world of favours to apps like YouTube, TVCatchup, iPlayer and the like when using it’s external speakers.
            Using buds is a bit more awkward – some things I’ll still use it, but others I won’t. It’s quite annoying when your music taste is sometimes bettered by Beats, but some times bettered by a more refined EQ in PowerAmp.

          • Butters619

            See I could see it helping with the external speakers since it raises the volume and boosts the low end. But again, attached to any real stereo system, it sounds like poop. Even with over ear headphones I’m not a big fan.

          • Mike D

            Yeah for sure, I agree. Through my stereo it sounds like it’s driving too hard.

        • No_Nickname90

          I have noticed that in my car. My E4GT (GS2), I was able to have my fader on my front speakers at max. Now that I have beats, I have to turn the fader to like 3. I’m reducing the sound to my front speakers.

          I have to do this because my car has small front speakers. 3 1/2’s speakers, so they can only be 2-way speakers. Beats gives too much bass to them and they start sounding all bad. LoL!!

          My back ones are fine, though. I equalize my radio to help control that stuff.

    • Dean Politis

      Wrong, have you heard the sound coming from the HTC One without earbuds? It is the best sound I’ve every heard coming from a phone or tablet.

      • Butters619

        I have actually. A good friend owns a One and he has the same complaint. I’ve also heard his One attached to my car stereo and it’s the same problem. The beats software inflates the low end to the point of distortion. Connect it to a real audio system and it sounds disgusting.

        • Dean Politis

          I am not disputing what you are saying. I just disagreed that it only sounds good with the earbuds. On the HTC One, it sounds good from the phone’s speakers.

          • Butters619

            We actually covered this a bit below here. Any lower powered speakers it may sound better on. So earbuds, phone speakers, and stock car stereos. Anything with a dedicated amp and it’s going to sound bad because the distortion becomes glaringly obvious.

  • https://plus.google.com/u/0/107214144202094295079/posts James

    …and cue the anti-beats circlejerk in 3, 2…

    • AndreKP2124

      It depends who cares about brands and who doesn’t. I don’t care about Beats or any other on fashion brand, because I like to find products that have good quality and at the same time are good for your money… I didn’t try the Beats earbuds yet, but some time I will try one and see if this one is worth the price, compared to other earbuds I bought…

      • Butters619

        Beats earbuds aren’t “bad” they are just way overpriced for the qudio quality you get. It’s similar to Bose. For the price you pay you can find significantly better products.

        • AndreKP2124

          Ok man, I have another question: Will an on fashion brand like Michael Kors or Beats grow your sex appeal or that is just a urban myth?

          • Butters619

            Depends what kind of girls you are going for.

          • AndreKP2124

            For example: The hot girls

  • Steven Skwarkowski

    I cant imagine this business model. Reminds me of the Starbucks business model:

    -Who in the world is going to pay $5 for a cup of coffee?

    I.E.

    -Who in the world is going to pay $100+ for basic/cheapy headphones

    A sucker is born every minute. I dont feel like researching, but its Beats owned by Monster, the same company who fools people into $90 HDMI cables?

    • OptimusKLP

      $90 HDMI cables wtf???? Seriously wtf, i just bought one off eBay for $1.50 (1 metre), i’d never pay more than $10 for one.

      • Steven Skwarkowski

        Exactly; Monoprice cables when put in side-by-side tests against Monster Cables show nearly identical performance. I cable is a cable.

        $100 HDMI Cable: http://www.bestbuy.com/site/Monster—1000HDX-8'-HDMI-Cable/2317214.p?id=1218320404198&skuId=2317214

        • No_Nickname90

          That is clearly $99.99, not 100. Way to deceive people. Oh yea, I took the time to point out that one cent difference. LoL!!

        • Fuzzypaw

          A friend of mine actually worked in a warehouse where Monster was paying him and his coworkers to open monoprice cables and repackage them in Monster packaging.

      • Ceefax

        It’s the higher price = higher quality belief in the majority of a consumerist society.
        TBH if they’re willing to waste $90 buying a HDMI cable by not believing the proof out there on signal quality, i’ll gladly sell them one (or three).

      • somesome11

        There is a legitimate use for expensive cables, which is for pros who constantly manuever around and plug and unplug cables multiple times a day, and if you’re running a production with thousands of millions or viewers you don’t want a $1 cable. Cheap sheilding will crack, thin strands of copper or aluminum will tear and split, and the “gold plating” on cheap cords often isn’t real gold or copper and scrapes off over time. That said, the $100 monster cord doesn’t even have braided cabling, you do pay a premium for better shielding but that’s a ridiculous price. Monster is also a Best Buy markup dream; I buy Monster equipment regularly from Amazon and other sources for a heck of a lot less, and it’s good for the price. Places that sell at the MSRP tend to be ripping off their consumer, so that’s why I’d never shop at Best Buy. Consumers who make a point to always avoid Monster are just as ignorant as the suckers who pay the MSRP for them; they do have pro quality equipment in most cases, much better than monoprice, just make sure it’s at least 50% or less of the MSRP. I personally prefer Amazon’s line as they are cheap and much better quality.

    • http://www.phandroid.com Quentyn Kennemer

      Beats isn’t owned by Monster. Monster had an exclusive manufacturing contract with Beats, but it has since expired and Beats is now an independent company.

      • Steven Skwarkowski

        Thanks for that info sir. I just thought the King of marketing and scamming poor saps out of there money was behind Beats.

  • andrew

    If I remember correctly, beats was introduced as studio grade headphones and audio equipment. It was never intended for the average consumer, at least in the beginning. Its kinda like a how a computer mic is $20 bux but a studio mic for your computer is several hundred with very few differences that can only be seen when you really examine them.

    By brother has one of the nice sets of beats headphones(not ear buds) and I was actually impressed with the sound quality. Another example would be my triton gaming headset that gives full 7.1 simulation in the headphone. When the speakers are so close does 7.1 really matter? Yes. I can hear the foot steps amd which direction they come from….

    Never tried the ear buds or the HTC equipped phones, so maybe that’s a bit different. All I know is that the high end beats headphones are good

    • Tus-Chan

      The reality is that Beats were introduced for idiots who think they’re getting studio-grade headphones, much like how people who buy Jordans think they’re getting professional-level basketball shoes.

      Nobody mixes with headphones in a studio, nobody uses intentionally colored playback gear to mix with in a studio, and nobody cares how fashionable you are in the studio. It’s that simple.

  • Trent

    I prefer to listen to my music the way it was recorded. WITHOUT any “enhancements”.

    • uniquename72

      It’s not possible to listen to digital music without enhancements, just as it’s not possible to take a digital image without post-processing.

      Even if you don’t use an equalizer, your hardware and software are making a million decisions for you in the process of turning those bits into sound.

      Similarly, even if you don’t use photoshop, your JPEG engine alone is fully processing the image in hundreds of subtle ways.

      So while it’s very fashionable to pretend that you don’t like “enhancements” to your digital media, it’s physically impossible to experience digital objects without enhancements.

      Go back to analog if you don’t want digital enhancements (but then note that analog hardware also creates various enhancements, of greater or lesser quality).

      • Trent

        Well then I prefer the free enhancements that don’t cost the company I buy phones from a half billion dollars.

        • Tom Sly

          DSP Manager anyone ?

  • http://about.me/marianneevans Marianne

    For earbuds…IMHO the Bose ones can’t be beat. They sound decent, which is all I expect from an earbud and more importantly they don’t hurt or fall out. I’m referring th the MIE2 or SIE2 types. Seriously all other earbuds hurt and/or fell out for me and these have been the best for running. I originally had the MIE2’s and then got the sport ones for the water resistance. The only thing I don’t like is the sport ones are made for Iphones that have the reversed rings on the tip basically, so the inline audio buttons are useless. I hate all the Idevice crap. Anyway, for full headphones, I love Grados.

  • Me

    Beats suck anyway. I’d be happy if I was HTC

  • Wirenut52

    I’m amazed by how little most people understand about accurate audio playback. If you’re not using a lossless digital format, you’ve already lost part of the original information in the recording. The lower the bitrate, the worse it gets. Screwing around with EQ, compression, and ambient or “spatial” processing makes it sound different, but not necessarily better. The whole “Beats” concept is to lure people into buying a “fashion brand” at ridiculously inflated prices whether it’s any good or not (cuz Dr. Dre knows, right?)

    Ear buds played too loud will make you deaf, anyway (especially the crappy ones packed with MP3 players and phones), so maybe sound quality doesn’t matter to most people these days. By the way, your 1/2″ phone speaker will NEVER sound good. The 2″ speakers you plug into your phone will NEVER sound good.

    If you can’t afford a room-filling audio system with decent speakers, try GOOD headphones. With full-sized supra-aural headphones (like Grado, Sennheiser, AKG, even Sony) you have a much better chance at hearing good audio. At least if you play those too loud you’ll enjoy going deaf. I try to protect my hearing because I really enjoy hearing what you can hear in a good recording on a good playback system. A playback system is ideally supposed to be neutral, so you can hear the recording as it was recorded. From that starting point you can make some subtle “enhancements” if it makes you feel better, without distorting, compressing, or otherwise screwing up the sound.

  • Warwickstingray

    Using Beats on an HTC one with Spotify tracks on extreme setting is good enough for me. Even makes my car stereo sound ok. The beats system is more than just EQ and works well enough. It will never please fussy audiophiles but it does make the sound better on my device than any EQ I’ve tested. These companies make money from pleasing the masses. Lets face it they don’t make much money from people that will never be happy whatever they do so why should they bother?