Late last night, HTC announced that they had a “Major News Announcement” to share this morning.
With HTC having made some of the finest smartphones we’ve ever seen (like the Thunderbolt, the 7 Pro, and the world’s original Android device, the G1), anything they consider “major news” is probably worth tuning in to.
So, what might they announce? Thanks to some late night leaks, we’ve got a pretty good idea — find the details, along with our live notes from HTC’s teleconference, below.
Refresh the page to update notes.
8:26 a.m: I’m waiting on the call now. The call is scheduled to begin at 8:30 A.M pacific.
8:27 a.m: Based on some news that broke late last night, we’re expecting HTC to officially announce that they’ve formed a strategic partnership with Beats Electronics, makers of the Beats By Dr Dre line. It’s likely that HTC will be announcing that they’ve acquired a majority stake in the Beats line, with an investment in the hundreds of millions of dollars.
8:31 a.m: Still on hold. This is probably the smoothest smooth jazz I’ve ever heard.
8:35 a.m: 5 minutes later, we’re still jammin’ away to some sultry jazz tunes. Pretty sure HTC forgot about us here.
8:37 a.m: To be clear, today’s press call wasn’t supposed to have been cancelled due to bits of the news breaking last night. HTC confirmed to everyone last night that the call would still go on, with additional details discussed.
8:38 a.m: Here we go! They’ve brought us into the call. Peter Chou (CEO of HTC) and Jimmy Iovine of Beats are leading the call.
8:39 a.m: Peter Chou: We’re very excited to announce this partnership. We plan to bring “studio quality” sound to handsets.
8:40 a.m: “Quality of design has always been a very high priority for HTC. When we met with Beats, we were very impressed with their knowledge and technology in the music area…. The team at Beats really understands music, and really understands the music experience.”
8:41 a.m: “With this strategy, with this investment, we’re able to bring the best people from two sides to make a very deep integration of Beats technology in the software, and the hardware. This is a great opportunity to take the mobile experience to the next step. Mobile phones — the smart phones — are very powerful. It makes it easier than ever to enjoy music… but the sound quality hasn’t caught up yet. This is an opportunity for us to provide great sound quality”
8:42 a.m: Yeah — so far, no new details. Just a lot of talking about how awesome the partnership is.
8:43 a.m: Jimmy Iovine is now on the call
8:44 a.m: “When a record is made, millions of dollars are spent on getting that emotion into music. When you then take it and put it on CD, and then MP3, you lose that emotion. [Because of these Mp3s, and bad earbuds], we’ve lost approximately 2 generations of sound.”
8:45 a.m: According to Jimmy Iovine, Beats went to HTC to ask them to invest.
8:46 a.m: Iovine: “Why Apple works so well, is because they have a head. What Steve Jobs does, the company follows. I’ve found that here with Peter.”
8:47 a.m: We’re moving into Q&A.
8:48 a.m: “What will this deal do to enhance the phone? Are consumers really looking for sound quality?” Jimmy Iovine: When we started Beats, people told us “no one cares about sound”. 3 years and 8 million headphones later, we’ve completely penetrated headphone sales between 12 and 20 years old. We brought it to them with culture, but it made them realize that quality matters. You’ll find that over the next few months, ALL phone companies will upgrade their sound quality. HTC will be first. Peter: This partnership is built on the idea that amazing sound is the key to an amazing mobile experience.
8:51 a.m: Will these be about headphones sold with the phones, or tech built into the phones? Peter: It’s not just purely the handset, it’s going to be a “holistic experience”. We see the possibility that we can create a lot more exciting innovations in the market place. [Didn’t… really answer the question, there.]
8:52 a.m: “Why did you invest in Beats, rather than just license it?” Peter: We believe to create innovation, we have to have the two companies be working together day and night.
8:53 a.m: Can you confirm that this is a $300 million investment? Peter: Yes. This is a $300 million investment.
8:54 a.m: Jimmy Iovine on the size of the investment: The valuation that we came up with here.. was from March. Since then, Beats sales have doubled, but we kept the price the same [because we like HTC]. We, as in the music industry, HAVE to get to phones. This expedites that.
8:58 a.m: What, if anything, does this partnership do to your relationship with HTC? Jimmy: I talked to Todd [Bradley] and he was thrilled for us. It’s in HPs best interest to continue building out the brand, and our goal is to fix sound everywhere — but we’ll have an exclusive relationship with HTC in phones. (Sounds like Beats will continue to work with HP and other brands in computers, but will work strictly with HTC in phones)
Aaaand they’ve just ended the call. The primary interesting bits here: HTC confirmed that the investment was, in fact, $300 million, for their 51% stake, while Jimmy Iovine disclosed that this valuation was built back in March and that Beats tech in phones will likely be an exclusive to HTC. Thanks for tuning in, everyone!