In their research notes released Friday, the three brokerages said they have maintained a "buy" recommendation on HTC shares after the acquisition.
Earlier this week, HTC announced it will acquire a 51 percent stake in Beats Electronics for US$309 million (NT$8.96 billion).
Eyeing the success of Beats in harnessing the popular culture market among the young generation through its stylish and trendy products, HTC will use the partnership to "bring a high performance sound" to its phones in the autumn.
Goldman Sachs said the investment in Beats is expected to help HTC boost the visibility of its brand in the competitive global smartphone market as the presence of Beats' products will enhance the "entertainment" value of its phones.
Established in 2006, Beats Electronics makes high-end headphones and speakers. Its co-founders include U.S. rap music star Dr. Dre and producer Jimmy Iovine.
According to HTC, Beats posted US$150 million in sales for the first half of this year and revenue for the entire 2011 is expected to total US$350 million.
Bank of America Merrill Lynch said while the deal is unlikely to reap a quick return for HTC, the acquisition is expected to raise the awareness of the HTC brand in the long term.
In addition, the acquisition should help HTC penetrate the pop culture and broaden its customer base, the brokerage said, adding the Beats products are expected to maintain or even raise HTC's average selling price.
In the second quarter, HTC's average selling price hit US$349, down 2.8 percent from the first quarter but up 2.6 percent from a year earlier.
UBS Securities said as HTC launches two new models that will integrate Beats' audio technology during the fourth quarter of this year, the deal will help the Taiwanese firm take the lead in the global smartphone audio business.
HTC closed down 3.03 percent at NT$800 (US$2.76) on the Taiwan Stock Exchange Friday
No comments:
Post a Comment