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.
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.
With the speed cryptocurrency is emerging as the millennial generation’s alternative asset of choice in India, it is hard to imagine that just two years ago a couple of blockchain pioneers were briefly in police custody. Sathvik Vishwanath and Harish BV, cofounders of a then five-year-old start-up, were arrested in late 2018. No, they had not pulled off a shady initial coin offering. Their “crime” was that they put up a kiosk in a mall in Bangalore where customers could swap bitcoin, ether or ripple for cash or vice versa. That was the whole point of unocoin, their crypto token exchange.
A Chinese factory owned by South Korean semiconductor giant SK Hynix Inc yesterday halted operations after a plant worker was found to have an asymptomatic infection of COVID-19, Xinhua news agency reported. The South Korean worker based at the plant in Chongqing since February had departed on Thursday for South Korea, Xinhua reported. He was tested at Incheon Airport in Seoul and confirmed positive for COVID-19 on Saturday, it reported. All factory staff as well as staff and recent guests at the hotel where the worker lived have been isolated and given nucleic acid tests, the agency said. “We’re cooperating with the local government
FIVE NEW FABS: An acquisition of Siltronic would boost GlobalWafers’ market share from 17 to 30 percent, easily surpassing Japanese rival Sumco’s 25 percent GlobalWafers Inc (環球晶圓) yesterday said it is in final talks to acquire Germany-based Siltronic AG in a 3.75 billion euro (US$4.5 billion) deal, which might help it compete with its closest rival Sumco Corp of Japan. The acquisition would be the fifth for GlobalWafers since 2008, as it has grown to become the world’s No. 3 supplier of silicon wafers through such deals. GlobalWafers, which has a 17 percent market share, would see its market position greatly elevated to 30 percent when combined with Siltronic’s 13 percent, according to a presentation Siltronic gave to its investors at a quarterly conference in August. Sumco
A year of crisis for the lira has kept people in Turkey buying gold at a record pace. Now the appetite for more bullion risks becoming a drag on the currency just as a rally struggles to regain momentum. In the two weeks after Turkish President Recep Tayyip Erdogan cleared out the leadership ranks blamed for failing to stabilize the lira and draining reserves, Turkish retail investors and firms added US$2.2 billion to their gold holdings, taking them to US$36.4 billion, or almost triple the total last year, Turkish central bank data showed. People are not relenting in their zeal to own