Hi, I have found a piece of news that related to co-branding from BBC: Dr. Dre, one of the famous American rapper sold just
over half of his audio company Beats Electronics to a famous smartphone maker
HTC. The two
fast-growing brands will focus on bringing high performance sound to HTC phones
(HTC and Beats by Dr. Dre set t introduce new era in mobile audio 2011).
Here is the link:
The co-operation already begin and the relevant products already in the marketplace.
About Beats
Electronics and HTC
Beats Electronics
is an audio company that founded in 2006 by the famous American rapper and music
producer Dr. Dre, and Jimmy Iovine, the CEO of Interscope Geffen A&M
Records which is a division of Universal Music Group (HTC and Beats by Dr. Dre
set t introduce new era in mobile audio 2011). The aim of this company is to
design and produce the headphones which has the features and functions that can
fully present high quality of the music and vocal through the headphones just
as same as what the musicians and producers do in the studio (HTC and Beats by
Dr. Dre set t introduce new era in mobile audio 2011 2011).
As we known, HTC is a
famous world-class mobile device company from Taiwan. It was a global third-party mobile
device manufacturer before 2007. In 2007, HTC released its first cell-phone (htc.com/tw
2011). In 2008, HTC has become popular all over the world because of its Touch
Diamond cell-phone, a product that has strong features and functions to compete
with iPhone at that time.
With the rapid development in mobile device industry, the competition between
different brands has become more and more intense. Some companies raise up but some doesn't, such as the separate of Sony Ericsson. The competition now is not only
focus on the software area such as operating system and different kinds of
application but also focus on the hardware such as chip, camera and also the
touch screen so the innovation is critical to the smartphone manufacturers.
The strategic partnership between Beats Electronics and HTC is an
opportunity for two companies to redefine the smartphone industry
and define the future. According to this news, the purchased will be HTC’s fifth
acquisition this year and it is seems as the competitive force to fight with
Apple's iPhone. With this co-operation HTC will impact the smartphone
industry in its own way in the future especially in the music function even it used to do very well before this co-operation.
As mentioned, co-branding takes three forms. The cooperation
between Beats Electronics and HTC is ingredient branding, it is the placement of one brand within another brand (Clow and Bacck 2010, 64).
HTC can subjoin a new series for its smartphone that focus on the audio
quality such as music player to compete with iPhone’s iPod function, or even
provide a higher quality of the audio system with Beats' audio chip or relevant technology. This form of
co-branding just like Intel microprocessors in HP computers.
Co-branding like any other alliance cannot guarantee consistent attractive results for both sides (Thakare 2009). For example, when one of the partners feels that the return is inadequate or that the program is no longer fits its strategies or the existing products can no longer competitive with the competitors, this may cause the partner to withdraw or stay in the venture but lose the main competitive force just like the separation of Sony Ericsson. However, the difference between Sony Ericsson and HTC is that the form of Sony Ericsson is joint venture, the form of HTC and Beats is ingredient branding and the owner of Beats sold 51% stake to HTC, which means HTC now is one of the owner of Beats so the potential risks of the cooperation can be avoid in some way because the strategies are set around HTC. HTC may be successful in the field of music or audio system. Furthermore, it is more easier to control no matter the new product promotion or R & D process if HTC is in the leading position of the cooperation.
According to Clow and Baack (2010, 65), for companies and brands that are not as well known, co-branding is an excellent strategy. Even Beats Electronics is a very famous audio company in USA, however, it may not be that famous in other countries especially some Asia countries. According to this, the advantages increase brand awareness and more sales income will be achieved by this cooperation.
In conclusion, the cooperation between Beats and HTC is good for both sides but it must based on good communication and well consensus. The cooperation between HTC and Beats Audio can be seems as a kind of innovation and it is also a key part for smartphone company to survive in the strong competition.
Co-branding like any other alliance cannot guarantee consistent attractive results for both sides (Thakare 2009). For example, when one of the partners feels that the return is inadequate or that the program is no longer fits its strategies or the existing products can no longer competitive with the competitors, this may cause the partner to withdraw or stay in the venture but lose the main competitive force just like the separation of Sony Ericsson. However, the difference between Sony Ericsson and HTC is that the form of Sony Ericsson is joint venture, the form of HTC and Beats is ingredient branding and the owner of Beats sold 51% stake to HTC, which means HTC now is one of the owner of Beats so the potential risks of the cooperation can be avoid in some way because the strategies are set around HTC. HTC may be successful in the field of music or audio system. Furthermore, it is more easier to control no matter the new product promotion or R & D process if HTC is in the leading position of the cooperation.
According to Clow and Baack (2010, 65), for companies and brands that are not as well known, co-branding is an excellent strategy. Even Beats Electronics is a very famous audio company in USA, however, it may not be that famous in other countries especially some Asia countries. According to this, the advantages increase brand awareness and more sales income will be achieved by this cooperation.
Like people, brands are judged by the company they keep....
ReplyDeleteI think HTC has worked well on a strategic level by acquiring 51% of the share, as it makes them the leader...
It also opens up their target audience, as many who are fans of the star, will begin to purchase HTC due to it's association.
Yeah, you are right. Beats cooperate with some famous people all around the world in different area such as Lady GaGa, Yao Ming, Kobe Bryant and so on. These guys' fans will start to follow HTC's news because some series will offer Beats headphone when people purchase HTC cellphone.
DeleteEven the cooperation is good so far, but HTC seems realise something:
http://www.china-iphone5-cases.org/future-htc-will-reduce-product-beats-headphones-bound-policy/
Keep offering Beats headphone will cost a lot so HTC decide to reduce product Beats headphones bound policy. It seems for the long-term development.
As you've said, the ever increasing competition between mobile phones means that each brand has to come up with new things to offer to consumers. Since music is becoming a very big part of the whole mobile experience, HTC's partnership or more accurately acquisition of Beats, can really come up trumps for them.
ReplyDeleteAt the moment, I believe Beats are enjoying a lot of hype due to the number of professional artists using them, and actually delivering a superior result in terms of quality of their products. It has a lot of things going for them, and their quick rise from a start up into a household name in audio in just a few short years shows a spirit of innovation.
I guess the only drawback of the deal is that since Beats is a fairly new product, there is no guarantee that it can consistently provide the added spark that HTC needs to compete with other mobile phone makers. And while obviously HTC can incorporate Beats into their mobile products, I am still quite curious on how Beats can leverage its partnership with HTC.