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									Last August, Beats sold 50.1 percent of its shares to HTC in a deal that
apparently included some degree of financial support or payment from the
HTC. The $300 million purchase gave HTC a controlling share in the audio
accessory maker, as well as exclusive access to Beats technology for the
mobile market.

In fact, over the last year, HTC and Beats have made great progress in
sound innovation, product integration and brand awareness with successes
like the HTC One. Having received rave reviews, the HTC One X and One S
are undoubtedly the best phones currently on the market.

Unfortunately, as the Samsung Galaxy line of devices and Apple iPhones
have continued to take over more of the market, HTC has been unable to
fully support Beats Audio. HTC recently announced that the red Beats
Audio earbuds sold with premium Beats Audio smartphones were being pulled
because buyers did not want to pay a premium for better sound quality on
their smartphones.

"An accessory like the headphone doesn't factor in when someone is buying
a smartphone. If they want a Beats headphone, they'll buy it directly."
HTC product executive Martin Fichter, in an interview with CNET said.

HTC management shakeup and market share shrinking kept the company from
meeting its financial commitments to Beats, leading Beats to buy back
half of the shares it had sold to the Taiwanese phone maker. Because of
HTC originally purchased their 50 percent stake for $300 million, Beats
bought their 25 percent share back at the same equivalent price, $150
million.

Following the new buyback, Beats will hold approximately 75% of its own
shares, with HTC remaining the largest outside shareholder with
approximately 25%. Beats representatives have said that the deal will
provide the company with operational flexibility for global expansion.
According to some analyses, Beats holds 28.7 percent of the overall
headphone category, with 54 percent of market share among headphones
costing $100 or more.

In the other side, HTC will continue to hold a, "major stake and
commercial exclusivity in mobile," which means that you shouldn't expect
to see Beats Audio technology accompanying Samsung, Motorola or other
company's phones any time.

Furthermore, the two companies will continue to work together to stuff
Beats Audio technology into future HTC phones, and they're even going to
be working on a joint marketing campaign later in 2012.

Beats Audio is better off controlling its own destiny in place of HTC
control? Let's wait and see.

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