Iovine also commented on how other headphone makers had attempted to emulate Beats' celebrity endorsement business model (including Monster themselves, who unveiled Earth, Wind and Fire and Miles Davis-themed headphones at the 2012 Consumer Electronics Show), stating that "some of our competitors are cheap engineers who have never been to a recording studio. In October 2012, Beats unveiled its first two self-developed products, "Beats Executive" headphones and " Beats Pill" wireless speakers-Iovine believed that the company would now have to "control own destiny" in order to continue its growth. I didn't have manufacturing experience, but I had experience of building something from scratch… Every time we put out an album, it was basically like building a new business-a unique cast of characters, unique challenges and opportunities, and trying to figure out a unique path to market. At the time, neither Dre, Iovine or Wood were experienced in the operation of a company at such a grand level, but Wood explained in 2014: Monster would ultimately begin marketing its own competing line of premium headphones aimed towards an older demographic. Dre and Iovine subsequently decided to oversee the entire operation of the company, from manufacturing to R&D, and aimed to double its workforce to around 300 employees. On January 19, 2012, BusinessWeek reported that Beats and Monster would not renew their production contract and their partnership ceased at the end of 2012. Wood had previously worked under Iovine at Interscope Records. Luke Wood, President of Beats in May 2014, joined the company in January 2010, when the company was a "licensing business". Despite its majority acquisition, HTC allowed Beats to operate as an autonomous company. The purchase was intended to allow HTC to compete with other cellphone makers by associating themselves with the Beats brand, as the purchase also granted HTC exclusive rights to manufacture smartphones with Beats-branded audio systems. In August 2010, mobile phone manufacturer HTC acquired a 50.1% majority share in Beats for $309 million. HTC purchase and non-renewal of Monster contract Beats' use of endorsements by musicians helped the company aggressively target the young adult demographics. To promote its products, Beats primarily relied on celebrity endorsements by pop and hip-hop music performers, including product placement within music videos, and partnering with musicians and other celebrities to develop co-branded products. On August 1, 2014, Apple acquired Beats for $3 billion in a cash and stock deal, the largest acquisition in Apple's history. Concurrently, Carlyle Group replaced HTC as a minority shareholder, alongside Dr. The company reduced its stake to 25% in 2012, and sold its remaining stake back to the company in 2013. įor a period, the company was majority-owned by Taiwanese smartphone maker HTC. for headphones priced higher than $100, and the brand was valued at $1 billion in September 2013. In 2011, NPD Group reported that Beats' market share was 64% in the U.S. In 2014, the company expanded into the online music market with the launch of a subscription-based streaming service, Beats Music. Following the end of its contract with the company, Beats took further development of its products in-house. The company's original product line was manufactured in partnership with the AV equipment company Monster Cable Products. The subsidiary's product line is primarily focused on headphones and speakers. Since 2014, it has been an Apple subsidiary. Dre and record company executive Jimmy Iovine. The company was founded by music producer Dr. Dre, or simply Beats by Dre) is an American consumer audio products manufacturer headquartered in Culver City, California. Beats Electronics LLC (also known as Beats by Dr.
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