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HTC sinks $309m into audio tech from Dr Dre

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Handset maker HTC is buying a majority share of upmarket audio kit manufacturer Beats Electronics, promising to incorporate the Dr Dre-backed technology into handsets by the end of the year.

The deal gives HTC just over half of the audio-technology supplier, which promises to deliver an improved sound experience, but the beats brand also embodies serious street credibility as evidenced by the website, which features Kayne West and Lady Gaga sporting headsets.

Beats licenses its audio technology to companies including HP, which embeds it into some of their PCs and laptops. The company also has "beats by dr dre" and Monster brands, which are the ones being touted as the celebrities' choice (would you buy headphones which weren't endorsed by Paris Hilton? Of course not).

Those deals should remain in place, under HTC's ownership it will be the only company allowed to put the tech into phones, but other licensees shouldn't be affected.

HTC is pushing hard into smartphones, and with some success. The latest figures from Nielsen give HTC a fifth of the US smartphone business, with two-thirds of that being Android and the rest being Microsoft's outgoing and incoming mobile platforms. The same figures show that more than 35 per cent of the Android handsets being used in the USA come from HTC, well ahead of Motorola's 28 per cent share.

The company has come a long way from its OEM roots, carving itself a recognised brand and differentiating its handsets with the HTC Sense interface shell. Buying into high-quality audio could differentiate HTC even further, though one has to wonder how much of that $309m is paying for cool appeal rather than better technology. ®

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