The HTC teleconference announcing its $300 million partnership with Beats Electronics just wrapped, and we were able to grab a few tidbits that weren't so clearly evident in last night's press release. The largest questions HTC CEO Peter Chou and Beats head honcho Jimmy Iovine fielded were focused on the effects of the purchase and why it happened. Neither Chou nor Iovine shared many specifics, but we learned that the two companies will be deeply committed in a "special" and "exclusive" relationship, which Iovine referred to as a "marriage." In discussing the possible deal, he mentioned that Beats felt a need of urgency to penetrate the mobile marketplace and were bent on making it happen with HTC: "we have GOT to get to the phone...this marriage expedites that process." Computer and phone companies alike are realizing that they need to upgrade the (currently subpar) audio experience in their products, he said, and we should expect to see many of these businesses launching stellar improvements in sound quality over the next three months.
In answer to what HTC is looking for in terms of ROI, Chou discussed the desire to have more differentiation in the market, in terms of the branding and technology the purchase will bring to its products; he also told us that the investment will generate several hundred millions of dollars in return beginning later this year. Rather than solely focusing on headsets, HTC plans to integrate the Beats tech completely into the product portfolio. Exactly how extensive that consolidation will be remains a mystery for now; since the effects of this deal will come to fruition sometime this fall, however, we doubt we'll have to wait terribly long to find out.
