"Beats By Dre" Headphones Part Ways W/ Monster Supplier

Music mogul Dr. Dre's successful Beats By Dre will have to find a new manufacturing partner as reports claim the headphones line is cutting its ties with Monster Cable Products.

According to reports, Beats has decided to look elsewhere for a manufacturer.

In a Las Vegas hotel a few days before the start of the Consumer Electronics Show on Jan. 10, Interscope Geffen A&M Chairman Jimmy Iovine takes out an iPad and swipes through photos of celebrities wearing headphones from Beats Electronics, the company he co-owns with rapper Dr. Dre. Nowhere to be found among the photos is Noel Lee, the chief executive of Monster Cable Products, which has manufactured the headphones under exclusive license since their debut in 2009. The partnership between Beats and Monster, an electronics company best known for expensive stereo cables, has been an unmitigated success. Its products captured 53 percent of the $1 billion annual headphone market last year, according to researcher NPD Group. Now the partnership is coming to an end. Beats has opted not to renew its five-year contract with Monster when it ends late this year. (Business Week)

Additional reporting suggests complications over financial matters caused the split.

While both companies say the separation is amicable, the relationship turned sour over financial terms, according to two anonymous sources. The reason? Disagreements on which side deserves the most credit for the line's success. But Beats is ready to go off on its own. The company's sound technology is already in many computers made by Hewlett-Packard, the Chrysler 300 S sedan, and smartphones created by HTC. Beats also wants to expand into TVs and specialized audio gear for athletes. (XXL Mag)

In October, Dre confirmed reports claiming Beats By Dre teamed with smartphone supplier HTC for a $300 million investment.

"I am trying to build my electronics company, Beats Electronics. We just signed a major deal with HTC and we have cell phones coming out in the next two weeks. I am involved in Chrysler; we are in cars right now. My whole thing is to take over everything with a speaker. That is what I am shooting for. The phone will be on Verizon and, like I said, it is going to be out in the next 2 weeks. ... I am trying to be number 2 to Apple, and number 2 to Apple is not a bad position to be in." (Global Grind)

Details of the mega deal became public knowledge around mid-August.

The partnership, announced on Thursday, will lead to a line of HTC devices integrated with Beats "sound innovations", according to a statement from the company. The devices will be available this fall. Beats Electronics is a developer of high-end headphones, which claim to reproduce the sounds heard in professional recording studios. The company also helped build an audio system for Hewlett-Packard's ENVY laptop series. HTC is investing $300 million for a majority stake in Beats, which also has UniversalMusic Group as a stakeholder, according to media reports. (PC World)