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Remember the Last Time Beats Sold Itself to a Phone Maker?

Yeah, that HTC deal didn't work out so well. But Apple is not HTC and these days Beats isn't even the same Beats.


If Apple does indeed complete a deal to acquire Beats Electronics, it won’t be the first phone maker to have taken control of the venture.

It still has the opportunity, though, to be the first company to do so successfully.

Back in August 2011, Taiwan’s HTC paid $300 million to acquire a majority stake in Beats.

“With the magic of mobile devices, it is easier than ever to discover and buy new music,” HTC CEO Peter Chou said in an interview at the time. “However, without great sound experience, it is a shame.”

Beats CEO Jimmy Iovine, meanwhile, made the case that digital products had become the main vehicles for listening to music, yet sound quality had waned.

“We went to digital and got worse,” he said at the time of the HTC deal. “That’s unacceptable. What has to happen is anyone who makes consumer electronics that transmit music has to be encouraged — to put it mildly — to have great audio.”

Enthusiasm on both sides, though, quickly waned. Although HTC included Beats Audio on several phones, little positive came of the partnership.

In 2012, HTC pared back its stake to 25 percent, before selling its remaining stake in 2013. In all, HTC got $415 million back on its $300 million investment.

Beats, of course, has changed quite a bit. While it bought streaming music service Mog back in the days of HTC, it has since become a much bigger player in that market with the launch of Beats Music.

HTC and Beats had paid lip service to continuing to work together even after HTC sold its stake, but the two have gone their separate ways. In a sign of just how far the Beats-HTC partnership has frayed, HTC recently announced a souped-up audio version of its latest One phone — in partnership with Beats rival Harman Kardon.

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