“As the primary consumption of media moves to the smartphone, we have an opportunity to create a premium experience on that device.” That’s what Beats By Dr. Dre President and COO Luke Wood told the Wall St. Journal when HTC acquired a majority stake in the concern last August.

“This will give us opportunity to innovate,” said HTC Chief Executive Peter Chou in the same interview; “They really would like to deliver studio-like sound quality.”

Flash-forward to April 2012. Eight months later, the smartphone maker still owns the majority of Beats and their mobile devices still bear the hardware and software needed to support it. The distinctive Beats logo can still be found on the back of the new One series handsets. But the iconic red earbuds formerly bundled with Beats-enabled HTC handsets are gone.

“An accessory like the headphone doesn’t factor in when someone is buying a smartphone,” HTC executive Martin Fichter told CNET. “If they want a Beats headphone, they’ll buy it directly.”

I think Fichter makes a solid point, but I also think HTC has already bungled the Beats offering so badly, there may be no salvaging it.

beats team

For those unfamiliar, the Beats By Dr. Dre brand presents itself as a high-end audio experience. The hardware and software that make that experience possible are built into smartphones, computers, and even tablets: before scuttling their webOS operation, HP touted Beats integration with the TouchPad as a major selling point. There’s much debate on this matter among audiophiles, many of whom claim that Beats does little more than boost the bass and volume. But what can’t be debated as easily is the power of the Beats brand. With the exception of the iconic iPod/iPhone earbuds, no headphones are as widespread, distinctive and recognizable as Beats’ buds and cans, with their red wires.

When HTC bought a controlling stake in the company, it was assumed that they would leverage the resulting partnership to help HTC products stand out in the marketplace. The integration even extended to some unique, creative packaging.


We also got a visually interesting, if somewhat ridiculous, commercial campaign out of the partnership.

Clearly HTC was serious about marketing this exclusive new feature, which had cost them at least $300 million. But they severely fumbled the execution. The Beats software only functioned with the HTC-built Music app, meaning any third-party music applications (you know, little guys like Pandora, Spotify … Google Music) were stuck with standard audio. Reports also surfaced claiming poorer battery life when Beats was enabled, and sucking power faster is something that no Android phone needs help with.

Most importantly, though, the phones HTC chose to launch their expensive new differentiator, the Sensation XL and HTC Rezound, were rather unimpressive. Sure, their specs were fine, and the 4.7-inch display on the former was a niche selling point … but we’ve seen what HTC can do when it wants to make a truly groundbreaking product. That’s the original Evo. That’s the new One series. It’s not the Rezound, and it’s not the Sensation XL. Have a look at the company’s 1Q2012 earnings to confirm that: the 70% drop in year-over-year profits tells part of the story.

A few stumbles out of the gate don’t make a total failure, though. HTC can still quite easily salvage their valuable Beats property. So why are they shooting themselves in the foot by ditching the earbuds?

Let’s be real for a second: I know we’re talking about earbuds here. On the scale of importance for included accessories, they sit somewhere between the international charger plug and microfiber shammy. We can all live without a new pair; most of us already have headphones of our own, whatever the brand. In that sense, HTC’s Fichter is correct.


Next stop: junk drawer.

But when do earbuds become more than just another piece of unboxing debris? When they’re the very components that enable the premium experience you’re trying to deliver. Can you plug in your own pair? Sure. But assume you’re not an audiophile; you’re just someone who’s been sold on HTC’s brand message that X is a great phone for jamming out to the latest Passion Pit album. If you’re buying a premium product that’s touting its prowess in delivering an excellent audio experience, why should you have to bring your own anything? This is akin to HTC releasing a new Evo 3D with a screen that requires glasses for the 3D effect, and failing to bundle them in the box.

Why HTC is doing this isn’t entirely clear. Beats’ main hardware supplier has historically been Monster Cable Products, but their recently soured relationship might spell increased hardware costs for the combined HTC/Beats outfit. Considering the horrible financial performance mentioned earlier, it’s possible that HTC is trying to pinch pennies by ditching a premium accessory that they didn’t feel was enough of a buying enticement.

If that’s the case, that’s where I think they’ve gone wrong. People weren’t avoiding the first Beats-enabled phones because they didn’t like the idea of premium audio; they didn’t buy because they saw a half-baked product being offered on pretty vanilla hardware. That’s different now. Going forward, the positive buzz surrounding the One product line will likely continue, and Beats may contribute to that … but now they’re hobbled by not offering the complete experience out of the box.

Some may think I’m overreacting by raking HTC over the coals for something as trivial as earbuds. Hopefully, the points made above illustrate why I feel this is a somewhat more critical oversight. We’ll see going forward if just incorporating the technology, sans in-ear hardware, justifies the price HTC has paid for studio time with the Beats brand.

HTC & Beats interview source: The Wall Street Journal

Headphones story source: CNET

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