It's no secret that handset maker HTC has been struggling in recent months, despite the critical success of its latest Android-based HTC One smartphone. Now it may have another problem as a high-profile partnership looks toward the exit sign.
The Wall Street Journal reported Monday that Beats Electronics may now be regretting its partnership with floundering Android smartphone maker HTC, who purchased a 50.1 percent stake in the headphone maker two years ago.
Company founders Jimmy Iovine and hip-hop star Andre Young (i.e., Dr. Dre) have recently expanded Beats' product line to include premium speakers as well as headphones, with other consumer electronics and even an online streaming music service on the radar.
The co-founders, who now own a combined 75 percent of Beats after reducing HTC's stake to only 25 percent last year, are reportedly looking to reduce that amount to zero even after attempts to raise $700 million for a buyout on HTC's share failed earlier this summer.
As part of its investment, HTC cornered the market on featuring Beats software technology into its key smartphones, many of which included Beats-branded headphones as well. Since then, HTC has shed 90 percent of its stock value as it dukes it out with Samsung in the mobile market.
"HTC originally saw Beats as a way to court the youth market," the report noted, a view that apparently soured quickly "with differences in opinion on strategy." Neither company would comment on any plans to part ways or replace HTC with another investor.
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