Analysts yesterday gave the thumbs-up to HTC Corp’s (宏達電) purchase of a majority stake in Beats Electronics LLC, saying this would give its brand the “youth” oomph factor it needed and allow it to reach the music-savvy crowd.
“Overall, this is an interesting deal from a brand building point of view ... This is indeed a well thought-out acquisition in synergy,” JPMorgan analysts Alvin Kwock (郭彥麟) and Ashish Gupta said in a report issued yesterday.
“HTC has been largely regarded as a ‘tech geek brand’ and -apparently Beats touches the hearts of youngsters aged 18 to 35, thanks to cheap viral marketing by Hollywood or sports stars,” they said.
Photo: CNA
Brand power is becoming increasingly important as commoditization is inevitable over the longer term, and that explains why HTC has opted for acquisition over licensing, according to the report.
HTC announced on Thursday it planned to pay about US$309 million for a 51 percent stake in Beats Electronics, a US venture involving superstar music producer Dr Dre, Interscope Records and Interscope chairman Jimmy Iovine.
Bank of America Merrill Lynch was also positive about the investment.
The acquisition will help HTC deliver a studio-quality audio experience, broaden its audience base and aid its transition from a technology brand to a lifestyle brand, Merrill Lynch analyst Robert Cheng (鄭勝榮) said in a report.
Founded by Jimmy Iovine and Dr Dre in 2006, Beats is one of the top three high-end stereo headset makers.
Among the selling points for the headphones, which cost US$150 to US$300, is that they supposedly offer sound superior to the white “earbuds” that come with Apple Inc’s iPods and iPhones.
According to Merrill Lynch, Beats posted sales growth of 300 percent last year and 280 percent during the first half of this year.
The average selling price for Beats headsets increased from US$183 last year to US$193 now, it added.
“In terms of sales or profit contribution, we don’t believe Beats can really bring significant impact. However, if HTC can successfully build the Beats user-experience into HTC phones and sustain (or increase) its ASP [average selling price], it would come as long-tail impact,” Cheng said.
Shares of HTC dropped 3.03 percent to close at NT$800 on the Taiwan Stock Exchange yesterday.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained