HTC is reportedly launching its own music streaming service with Beats Electronics in an effort to turn the company's flagging fortunes around.
According to a report from GigaOM, HTC and Beats will roll out new smartphones and tablets with Beats Audio features and the new music service as the devices' default music client. Pricing and plans are being worked out for the new streaming service that could end up as a rival to Apple's iTunes and Spotify. The report said that HTC is set to announce the streaming service at this month's Mobile World Congress at Barcelona.
The move, if true, makes a lot of sense. HTC bought the Beats Audio Company last year but so far the $300 million investment has only resulted in Beats earbuds bundled together with the manufacturer's smartphones. HTC had hoped the integration of Beats headphones and audio technology would sell more HTC smartphones but its HTC Rezound failed to make an impact. A music streaming service could be the one feature that would make HTC stand out from other Android phones.
Music services are a tough market to break into as many services like Pandora, Slacker and Spotify offer their for free. This is where HTC's stake in Beats Audio could provide the edge the smartphone maker needs. Beats co-founder Jimmy Iovine has many connections in the music industry. Iovine is also the head of Universal Music subsidiary label Interscope Geffen A&M so HTC has an influential partner who can get deals with record labels for licensing music for streaming. Record labels would want to deal with HTC and Beats as they could give revenue directly to the labels without going through a third-party like Spotify.
Iovine has been very public in his desire to move into different areas in the audio business. Last August when HTC purchased majority share in Beats, Iovine told The Times that, "The idea behind Beats has always been and still is to fix the degradation of sound in digital music. TV got better with HD and movies got better with high definition and digital has destroyed audio through the speed and convenience of compressing ... it. Sound is the [weakest] end of the computer and that's what we've been working to change. HTC gives us a technology partner to work with to make this change happen."
Beyond the streaming music service and headphones, HTC and Beats is also reportedly looking to sell wireless boomboxes that could play music from smartphones through a Bluetooth connection.
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