If you haven’t been following the latest news, it is a prerequisite to know that Apple has acquired Beats for $3 billion before reading further. The announcement has created a lot of confusion in regards to what the acquisition means for Beats and existing partnerships with the brand. Just to be clear, Beats collectively refers to both Beats Electronics, which markets high-end headphones, speakers and audio software, and the streaming music service Beats Music.
Prior to being acquired, Beats had several partnerships with other brands, including companies that are direct competitors with Apple. Most notable is Hewlett-Packard, which uses Beats Audio branding and technologies in its product lineup. AT&T has an exclusive deal with Beats Music to sell subscriptions and an unlimited music downloading family plan, and design firm Ammunition has a partnership to create Beats products. Even HTC has been in the mix.
Read ahead to find out how the Apple-Beats deal affects all of these deals…
A spokesperson for HP confirmed to CNET that the notebook maker will continue to develop products using Beats Audio technologies through 2014. When that deal expires, HP will continue to have licensing rights to sell products with the Beats logo and technologies through 2015. Despite the acquisition by Apple, HP is said to be planning an aggressive lineup of new products that use Beats branding. The partnership will end once those licensing rights expire.
The Verge and other reports confirm that AT&T’s existing deal with Beats Music will remain unaffected, despite its acquisition by Apple. AT&T will continue to offers its subscribers a three-month trial for the streaming music service, which regularly has a 14-day trial. The carrier will also continue offering its exclusive unlimited music downloading plan for families, allowing up to five users and ten devices access to Beats Music for $14.99 per month.
The design firm Ammunition had a partnership with Beats Electronics to design several of its products, including the Beats Pro, and Beats Pill headphones and speakers, but TechCrunch reports that the deal is officially off the table. The design of Beats products will transition to Apple over the next few months, under the leadership of chief marketing executive Phil Schiller. Just to add on top, Monster did not renew its five-year manufacturing deal with Beats after it expired in 2012.
Taiwanese handset maker HTC actually has not been affiliated with the Beats brand for the better part of a year. The company used to have a majority stake in Beats Electronics, owning 50.1-percent of the company and having exclusive Beats Audio branding for its HTC smartphones. But the company sold back 25-percent of its stake in Beats for $100 million in July 2012, and announced last September that it was selling back its remaining 25-percent stake for $265 million.
Within the next few years, we will slowly see Beats make a full transition to Apple. AT&T might continue to have a good relationship with the brand since it has partnered with Apple for close to seven years, but the other third-party partnerships will be off the table. Interestingly enough, however, is that the Beats Music app will remain a cross-platform service available on both Android and Windows Phone.