HTC sidelines CFO who thought $300m for Beats Audio was a bargain

HTC sidelines CFO who thought 0m for Beats Audio was a bargainWe recently reported on HTC's decision to stop bundling Beats Audio headphones with its handsets.

Now in itself that doesn't necessarily mean the Taiwanese firm is regretting spending $300m on the audio brand last year. At least it doesn't until you throw in the fact that the CFO who set the deal up has now been shifted aside after less than a year in the job.

Mainstream consumer electronics has not been kind to the audio industry over the years. While we've pushed forward relentlessly with display and graphics technologies, we're quite happy to accept integrated audio in our PCs, and listen to our MP3s on the train through rubbish headphones.

With all that in mind, spending $300 million on a digital audio brand when you're own position among the mobile phone elite is looking the shakiest it has in years is, well, nuts.

But that's not what HTC chief financial officer Winston Yung thought when hammering out the deal to by Beats Audio by Dr Dre. It was a huge punt on a brand that could only guarantee value from a marketing point of view.

While people will buy a phone for its display quality, and might even do so purely because of its camera quality (or at least Nokia hopes so), people just aren't going to choose a handset for its audio smarts, never mind a pair of bundled headphones. They'll happily accept it as a bonus feature, but it'll never be the prime reason for buying the device in the first place.

All of which will no doubt finally get through to Mr Yung in his new corporate development role at HTC – a position that smacks of being the corporate equivalent of a comfy chair right next to the exit door.

It's too early to say what the move means for Beats Audio's future itself, but all things considered we imagine new CFO Chia-Lin Chang would be sorely tempted to cut the division loose again if the right sum of money was offered.

Via The Verge

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3 comments

Pondlife  Apr. 17, 2012 at 10:58

I think the main issue was that they weren't buying a quality brand just a fashion accessory brand. Dare say there are those who consider audio as an important feature when buying a phone but mostly they wouldn't want something interfering with how the music should sound.

tappy456  Apr. 17, 2012 at 11:38

I actually thought it was a good idea poorly implemented.

They should have sold the phones under the beats brand (not HTC) and they should have styled them similarly to the headphones available in multiple colours and then handed them out to a load of footballers and rappers to promote.

They'd be selling like hot cakes now if they did. Instead, they did the same as HP and it's merely an extra function to another device. A function that people aren't that bothered about.

krogothnx  Apr. 17, 2012 at 17:14

people just aren't going to choose a handset for its audio smarts, never mind a pair of bundled headphones. They'll happily accept it as a bonus feature, but it'll never be the prime reason for buying the device in the first place.

Particularly when they aren't even good headphones... they're just trendy. Just like skullcandy headphones were popular a couple of years ago.

i pair my phone with a pair of Allen & Heath Xone XD-53s. now those are good headphones. no chance you'd get them bundled with a phone though.

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