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Did you know: HTC owned Beats before Apple
With so much competition on the Android market, between stars like Samsung, OnePlus, Xiaomi, and others, it’s easy to forget about HTC. Without releasing a flagship phone since 2018, the Taiwanese brand seems to have vanished from the smartphone scene almost completely. When they do make the news, HTC phones only stand out through their lack of ambition.
Yet, at the beginning of the previous decade, HTC was a market leader in many regards. It offered phones with unique designs, a fun, distinctive UI, and most of all, great sound. But did you know that HTC owned a majority stake in Beats Audio before Apple?
Here is what the HTC-Beats partnership produced and why it was so short-lived.
The Beats acquisition
HTC placed importance on smartphone sound quality from the beginning. While other manufacturers were satisfied with one measly speaker on the rear of their devices, HTC shook things up with the Desire HD in the early 2010s.
The Desire HD’s speaker grille was located above the screen. This made it hard to cover, regardless how you held your phone. It might not seem like a groundbreaking decision on the surface, but for many users it was a game changer. HTC also offered digital surround sound and Dolby Mobile Audio, which could be enjoyed when wearing headphones. Both were impressive features for their time.
However, HTC wanted audio to become an integral part of their brand image. Enter Beats by Dre. In the late 2000s, Beats was transforming the market with their colorful high-end headphones. The company’s marketing was relentless. As a founder, Dr. Dre secured endorsements from many popular artists, as well as product placements in their music videos. This made Beats products very trendy among younger demographics, and that didn’t go unnoticed by HTC.
HTC acquired a 50.1% share in Beats by Dre in August 2010 for $300 million. The deal gave HTC exclusive rights to release smartphones with Beats-branded software, which is what the Taiwanese manufacturer seemed to have been most interested in. HTC allowed Beats to operate autonomously otherwise.
Beats-powered HTC phones
The first Beats-powered phone was the HTC Sensation XE. Released in October 2011, it came with Beats earbuds in the box, as well as Beats Audio software, which promised to enhance the listening experience. Unfortunately, the HTC Sensation XE failed to wow the masses. It was a good device, and the Beats implementation didn’t hinder its success, but it did little to ensure it either.
Audiophiles and regular users alike remained unimpressed, comparing the Beats Audio software to a glorified equalizer. On the other hand, reviewers often felt that the software only boosted bass, which did little to improve the experience when listening to certain genres like rock or classical.
Beats Audio software also didn’t work with most streaming apps before the HTC Sense 4.0 update. This rendered it useless for those that wanted to enjoy their favorite tunes on Spotify or Pandora for quite some time.
Despite the lukewarm reception of the Beats integration, HTC had a good year in 2011. Unfortunately, things were about to take a turn for the worse in 2012. Like it often happens with popular products, Beats headphones saw a major backlash from consumers who thought their price-to-quality ratio wasn’t justified. We aren’t sure how much this influenced HTC in the grand scheme, but it definitely didn’t make things easier for the company.
The next Beats-powered flagship HTC released was the One X. While some still have fond memories of the device, it was a step back for HTC in many regards. I say this as someone who owned the phone and as someone who was an ardent HTC supporter. The device had different versions across regions, but the international version was particularly disappointing.
The One X did away with HTC’s signature unibody metal design and opted for polycarbonate instead. The rear speaker of the device was underwhelming and easy to cover with your hand. The biggest letdown was that the phone didn’t even come with Beats earbuds in the box in the US, Canada, Australia, and a good portion of Europe. That’s without even mentioning the Wi-Fi reception issues present in One X handsets equipped with the Nvidia Tegra 3 SoC.
Therefore, it wasn’t surprising that the HTC One X was overshadowed and outsold by Samsung’s Galaxy S3 and Apple’s iPhone 4S. As a result, HTC suffered major losses in the first half of 2012.
The beginning of the end
Financial losses likely led HTC to sell 25% of its controlling share back to Beats in July 2012. According to the Taiwanese manufacturer, the move was designed to give Beats “more flexibility for global expansion,” but we’re sure getting $150 million back didn’t hurt HTC either. The company still kept the Beats smartphone exclusivity rights, and made use of them on the following flagship too.
The HTC One M7 and its dual front-facing speakers were very well received. Unfortunately, HTC was still recovering from the previous year, when its stock went down by almost 80% compared to 2011 prices. Apple and Samsung were also much more aggressive with their marketing, further squeezing HTC out of the market.
Beats seemingly seized the opportunity in September 2013, buying back all of its remaining shares from HTC and ending their partnership. No reason was disclosed, but it’s hard not to think that HTC’s financial struggles played a role.
Life after Beats
HTC recovered somehow with the One M8, which is still known as one of its best phones ever. Announced in March 2014, it didn’t feature Beats Audio, but its sound quality was unrivaled. It utilized HTC’s own BoomSound software, which was well received by reviewers. The sound was crisp and clear, and no smartphone on the market could compete.
Meanwhile, Beats continued its rise. In May 2014, just weeks after the release of the One M8, Apple announced it would acquire Beats for $3 billion.
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HTC continued its audio efforts with the M9 and HTC 10. The latter featured a dedicated DAC and Hi-Fi sound, but it seemed to be the last hurrah from the Taiwanese manufacturer. Subsequent phones were less focused on audio, with some even dropping the headphone jack.
Nevertheless, other manufacturers were quick to settle in the niche HTC had created. Google followed in HTC’s footsteps, incorporating front-firing stereo speakers into the majority of its Pixel phones. However, today HTC’s true successor as the audiophile smartphone brand is LG. The Korean manufacturer’s phones still sport a headphone jack, along with dual speakers and a quad DAC and are widely considered the best option for customers who value good audio over everything else.
Beats played a small, albeit important role in HTC’s history. If nothing else, the story of HTC’s involvement with Beats demonstrates that branding alone is not enough to succeed in the smartphone market.
This is the fifth post in our “Did you know” series, in which we dive into the Android history books to uncover important and interesting facts or events that have been forgotten over time. What do you want to see us cover next? Let us know in the comments.