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HTC expects $85 million in profit from the sale

Smartphone maker HTC has officially announced that it will be disposing of all shares held in Beats Electronics. HTC says that it sold 26,100 class B units in Beats Electronics, representing 24.84% interest in the company. The stock was sold back to Beats itself.

HTC says that after shedding all shares of the stock it currently has 0% equity in the company. The sale, which reportedly raised $265 million, is expected to close in Q4 and HTC expects to make about $85 million in pretax profit. The deal will also see Beats pay back a $150 million promissory note plus any accrued interest.
 
Beats -- founded by music producer Jimmy Lovine and rapper Dr. Dre -- is an audio company famous for integrating its sound technology into HTC smartphones, but probably better known for its line of headphones.

HTC is currently finding it very difficult to compete on the global smartphone market, as its global market share sat at only 2.8 percent earlier this year.

Sources: HTC, Bloomberg



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What does this mean for HTC devices?
By techxx on 9/30/2013 10:27:18 AM , Rating: 2
Does this mean we won't see BoomSound on future HTC devices? Or perhaps it means they will no longer have exclusive rights to it.




RE: What does this mean for HTC devices?
By SAN-Man on 9/30/2013 10:38:01 AM , Rating: 4
HTC needs cash, that's all.

I doubt this impacts HTC's use of the technology.


RE: What does this mean for HTC devices?
By othercents on 9/30/2013 10:55:37 AM , Rating: 2
It isn't just cash. This repurchase of stock from HTC was initiated by Beats. Boomsound with just the dual speaker setup could be part of newer devices, however using Beats Audio to power Boomsound might or might not be part of newer HTC devices. This all depends on HTC licensing the technology from Beats, or HTC still having some ownership over the technology.


RE: What does this mean for HTC devices?
By Samus on 9/30/2013 5:43:30 PM , Rating: 2
I don't even understand what Beats "technology" is...


By someguy123 on 9/30/2013 9:07:50 PM , Rating: 4
Pretty sure it's just a generic dac with an equalizer that blows out midrange bass. gotta have that thumping cover up nonsensical lyrics about clubs and money.


RE: What does this mean for HTC devices?
By bug77 on 9/30/2013 10:39:11 AM , Rating: 2
Beats licenses their stuff to whoever has the cash. Unfortunately, instead of fidelity they just offer emphasized bass. Not that I'd look for fidelity in a speaker with less than a square inch surface, but somehow HTC thought that was a good idea.


RE: What does this mean for HTC devices?
By techxx on 9/30/2013 11:04:47 AM , Rating: 2
BoomSound is way more than emphasized bass. It blows away every smart phone on the market for bass and fidelity.


RE: What does this mean for HTC devices?
By testbug00 on 9/30/2013 11:23:49 AM , Rating: 2
Beats made headphones that really only fit for, well, listening to music that Dr. Dre made.

HardOCP did some reviews of headphones.

If you want a company that will truly give fidelity, you should probably partner with Audio-Technica.

That being said, the HTC w/ Beats Dual____ + epic music, etc. is probably one of the best phone speaker on the market (Built in) in terms of bass.

In terms of fidelity, my 1020 seems to be slightly better than my friends HTC One, at least from what we can hear.


By aliasfox on 9/30/2013 2:51:25 PM , Rating: 2
Yep. Not necessarily bad, but definitely overpriced and highly marketed.

But never underestimate marketing. Aside from Beats and Bose, neither of which are particularly highly regarded, how many high-end headphone brands have most people heard of?
- Grado
- Sennheiser
- Audio Technica
- Beyerdynamic
- Shure
- Etymotic

Among others. No marketing for these brands = no brand awareness. Same story for HTC, Blackberry, Palm...


RE: What does this mean for HTC devices?
By bug77 on 9/30/2013 12:16:41 PM , Rating: 2
BoomSound is also not about Beats. BoomSound is what one HTC partner stole from Nokia and almost got HTC banned in several countries. They were allowed to sell existing stock, but once it was exhausted, they can't use the feature anymore.


RE: What does this mean for HTC devices?
By BobsYourUncle on 9/30/2013 4:59:48 PM , Rating: 2
quote:
BoomSound is what one HTC partner stole from Nokia and almost got HTC banned in several countries.


This is factually incorrect with respect to BoomSound.

Unbeknownst to HTC, a supplier did ship them a quantity of Nokia designed microphones with exceptional noise cancellation properties for use in HTC's 3-microphone voice calling array.


By bug77 on 10/1/2013 4:13:18 AM , Rating: 2
My mistake, the trouble with Nokia was indeed over microphones. Still can't find what Boomsound really is, though.


By kmmatney on 9/30/2013 12:19:46 PM , Rating: 2
But the number of people who care about this is extremely small compared to the smartphone market as a whole. Maybe Beats is a real technology, but to me it's just marketing crap, and most people probably feel that way or don't care.


RE: What does this mean for HTC devices?
By Flunk on 9/30/2013 10:52:47 AM , Rating: 2
Seeing as the technology for "BoomSound" was actually developed by HTC and "Beats By Dre" is just a marketing scheme I don't think it will be an issue. The only thing that might change is the branding.

This honestly changes nothing, it's not like "Beats" really does anything at all.


RE: What does this mean for HTC devices?
By amanojaku on 9/30/2013 11:00:17 AM , Rating: 2
quote:
This honestly changes nothing, it's not like "Beats" really does anything at all.
Yes, it does. It raises the price of mediocre sound equipment to ridiculous proportions.


RE: What does this mean for HTC devices?
By testbug00 on 9/30/2013 11:26:04 AM , Rating: 2
not to mention makes people skip over the unmarketed better headphones that are cheaper.

My $150 headphones sound better than the $300 beats I have tried.

Alas, advertising does work very well, good for Beats, bad for people who want truly good headphones.


By amanojaku on 9/30/2013 11:48:57 AM , Rating: 5
It's not just advertising, it's celebrity marketing. Dre got his friends to display his products. Celebrities wear Uggs, girls want to wear Uggs. Celebrities drink Hennessy, "ballers" want to drink Henny. Celebrities used to use the T-Mobile Sidekick, then the iPhone. People started carrying the Sidekick, then dumped it for the iPhone. Now it's Beats. Next, it'll be something else. Never underestimate the power of the celebrity.


By inperfectdarkness on 9/30/2013 2:01:20 PM , Rating: 2
I don't care. HTC owning $5 of Sennheiser is better than HTC owning $500 million of Beats.


By Philippine Mango on 9/30/2013 10:12:36 PM , Rating: 2
If HTC could only make a phone that was more along the lines of Samsung rather than Apple, I think maybe more people would be interested. Problem I've got with the HTC is that they're trying too hard to compete with Apple but those who buy Apple products aren't savvy enough to NOT buy them so they really should be competing with Samsung instead. Not having a removable battery, having poor reception quality (not that Samsung is that much better), having no SD card slot is a deal killer for me. Why spend so much money on a phone when I know it will be a "dud" when the battery dies in it?

Apple users are unsophisticated compared to Android users so they expect more out of their very expensive devices which is one reason I believe the HTC One just isn't appealing enough. I do appreciate that HTC has an FM radio in their LTE phone which Samsung feels they cannot do but aside from that, there are just too many negatives for the HTC. Also I know some people hate touchwiz but I actually prefer that interface.




By flyingpants1 on 10/1/2013 1:01:08 AM , Rating: 2
The new HTC Butterfly S has a microSD slot and a 3200mAh battery. That's 40% more than the original HTC One, while keeping mostly the same profile.

I used to be part of the removable battery camp, but I changed my mind after I realised a few things:
-I hardly ever do it.
-Most people never do it.
-It's a huge hassle when you have a case such as an Otterbox.
-If your battery ever wears out, a battery replacement is cheap at any cell phone repair shop.
-Most importantly, it allows the battery to enjoy more capacity in the same sized phone. Personally I'd rather have the device last 15% longer, instead of having it be removable.

After using my S3 for a solid year, I think I'm finished with Samsung. I've switched camps completely.

It's funny that you say there are too many negatives for the HTC One. I would point out these things about the One:
-Better screen.
-Higher PPI.
-More accurate colors. Samsung oversaturates like crazy, this is NOT good.
-The screen is sharper. I can definitely spot the difference every single time. When compared with an AMOLED screen, iPhone and HTC One screens are so sharp, it looks like the edges of all the text are etched with lasers.
-LCD is ACTUALLY VISIBLE OUTSIDE (!) This is probably the most important thing about a smartphone.

-Better photos in low light. The SGS3 camera viewfinder often shows 100% pitch black in a dim room, when the One takes pictures no problem.

-More solid construction (not that this matters at all, if you use an Otterbox like I do)

-FRONT SPEAKERS are ACTUALLY LISTENABLE (!!!) The Speaker on the S3 is just trash. I will never, ever buy a phone again that doesn't have front speakers.


The wrong way around
By docnok on 9/30/2013 10:40:57 AM , Rating: 2
The title and content of this article is almost completely wrong except for the fact that shares were sold. Beats (Lovine and Dre) bought back their shares to get more control of their company now that they're doing HUGE business. It was a mark of their success and emphasizes the sinking ship that is HTC.




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