HTC Pins Its Hopes on Music and Software

A peek at Peter Chou’s smartphone reveals an abundance of ’70s and ’80s easy-listening hits from the Bee Gees, the Eagles, and Lionel Richie. “No rap,” says Chou, chief executive officer of Taiwan phonemaker HTC. In business, though, he is very much a fan of legendary hitmaker Dr. Dre. Chou bought his way into Dre’s inner circle last year when HTC paid $300 million for a 51 percent stake in Beats Electronics, the maker of high-end audio gear founded by Dre and Interscope-Geffen-A&M Chairman Jimmy Iovine. “We don’t care about the headphones,” says Chou. Instead, Beats’s technology—both hardware and software—will help make listening to music on an HTC smartphone a “unique and differentiated and awesome” experience, he says.

The Beats partnership is part of a high-risk strategy to keep HTC relevant and prove that a Taiwanese company can sustain a position as a top global brand. As its stock price and market share have crumbled over the past year, HTC has invested more than $420 million in companies specializing in games, cloud computing, and more. HTC’s aim is to reinvent itself as something more than a gadget maker. It aspires to be a technology icon that offers a full suite of services to device owners, following the example of Apple. HTC is “nurturing the relationship over time with customers, based on providing content, sales, rentals, and subscriptions,” says Drew Bamford, HTC’s associate vice president for user experience.