Beats by Dre Wants Out

Beats by Dre has become synonymous with HTC mobile devices and vice versa, this has been intentional, at least from the HTC side. They have in fact purchased a full 25% of the Beats Electronic company. Recently the the Beats company has been looking to buy back the HTC share and look for “fresh funds”. In truth I have no idea what “fresh funds” look like but I do sincerely believe that HTC is a sinking ship and tying your life raft to such a vessel is nonsensical. From WSJ:

The moves come as the founders of Beats Electronics LLC—music mogul Jimmy Iovine and American hip-hop producer and artist Andre Young, better known as Dr. Dre—are broadening the company's business from headphones to include speakers, audio systems in cars and consumer electronics and a soon-to-be-launched online streaming music service…

By this June, Beats had captured 59% of the U.S. market for premium headphones, according to NPD Group. That market, which includes all headphones and earphones costing at least $99, increased by 18% last year, according to NPD. But NPD consumer-technology analyst Ben Arnold said its growth will slow, and a challenge for Beats will be establishing itself as an audio brand beyond headphones.

Investors found the company's recent growth impressive, but a few questioned whether its success in the headphone market was merely trendy or something that could be sustained or replicated in other areas.

In truth Beats by Dre accessories have been way overpriced and are not nearly as good as most pro grade devices of a similar price point, but there is tremendous appeal around the name rather than the ability. It brings to mind the old adage, “…we do not buy goods, we are sold goods”.

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