Today HTC announced that they were buying a controlling share of Beats by Dr. Dre for $300 million. Beats By Dr. Dre is a brand of headphones and loudspeakers created by music producer/rapper Dr. Dre and Interscope-Geffen-A&M Records chairman Jimmy Iovine. The music industry power couple partnered with Monster Cable Products Inc. to produce their high-end headphones in 2006. Since this partnership, Beats have become a major player in the music technology space with big celebrity collaborations (P. Diddy, Justin Beiber, Lady Gaga, and Lebron James) as well as corporate pairings with Chrysler Motors and HP.

HTC claims that this was a move to improve the audio of their smart phones. However, to improve the internal workings of their phone why wouldn’t they partner with Monster Cable Products Inc? Monster creates and manufactures the actual technology that drives Beats. They have been producing quality consumer audio and video product since 1978. Branding is the answer. Monster’s brand is not big enough to carry the true motivation for HTC’s purchase – increased smart phone sales.
This is the era where brands carry far more value than products (2010’s top brands). It is important to establish strong brands that connect with consumers. Through influencer marketing, product placement, and celebrity endorsement Beats built its brand equity as a trusted provider of quality audio products.
Clearly HTC is looking to borrow some of Beats by Dr. Dre’s brand equity and push sales for their next line of smart phones. With new strategies being developed daily, there are several ways to create a strong brand. Tactics are mixed and matched depending on industry, target consumer, and other internal variables. The ultimate moral to the story is there’s money in quality branding.

Take it from Dre…he’s a doctor.
- barclay