The injection of money will give HTC one of the largest stakes in Beats, but the company will remain autonomous from HTC. Beats also counts Monster Cable as an investor and will still work with other companies such as HP, providing speakers for laptops and tablets, and Chrysler, providing speakers for sedans, said Iovine, who is chairman of Beats and chief executive of Interscope records.
But HTC will have some smartphones with Beats audio included in stores by the end of the year, he said.
“Getting Beats audio into HTC phones is one of the first things we’re going to do,” Iovine said in an interview. “We are going to be in business with HTC and they’re going to help us and were going to help them in every way they can. And you’ll see Beats audio in just about every phone or tablet they want it to be in, but they know what we’ve built and respect the brand and will help us continue to innovate and push Beats further.”
The partnership won’t mean that Beats will only work with HTC going forward — its relationships with HP and Chrysler remain intact, and its products will still work with Apple gadgets, a main selling point when the company launched in 2008, he said.
“The idea behind Beats has always been and still is to fix the degradation of sound in digital music,” Iovine said. “TV got better with HD and movies got better with high definition and digital has destroyed audio through the speed and convenience of compressing … it. Sound is the [weakest] end of the computer and that’s what we’ve been working to change. HTC gives us a technology partner to work with to make this change happen.”
The deal between Taiwan-based HTC and Beats has been a long time coming. The two companies first talked about how to work together at the Consumer Electronics Show in Las Vegas in January, said Jason MacKenzie, HTC’s president of global sales and marketing.
“We’re excited about this being a much deeper partnership than Beats has had with other companies in the past,” MacKenzie said. “The phone is the one product you’re carrying with you all the time and are relying on every day. There is really no product more personal than your phone right now and we want to make the best sound phones out there, when you’re watching a movie, listening to a song, making a call.”
MacKenzie and Iovine wouldn’t provide any specifics on what an HTC phone with Beats audio would look like or cost — Beats headphones range from about $120 for earbuds to as much as $600 for an over-the-ear set — but they did say tablets could make use of the company’s speakers in the future as well.
“It’s very important to us in the music industry that music makes the transition to the phone in a elegant way, in a quality way,” Iovine said. “Music on the cellphone should sound and feel great and we don’t want you to just download bad sounding mp3s and play them on bad sounding $3 earbuds. Why spend hundreds of dollars on a phone or a tablet and listen to music out of $3 earbuds? It just doesn’t add up.”