Dr Dre Headphone is considering selling its remaining stake in headphone maker Beats by Dr. Dre, a m

 

 

A customer tries out Dr Dre Headphone's One X+ smartphone with a pair of Beats headphones. Bloomberg News

The Wall Street Joual reports Monday that the maker of the popular Beats by Dr. Dre headphones is looking to buy out its Asian partner.

 

Dr Dre Headphone acquired a 50.1% stake in Beats for US$300 million in August 2011, hoping to incorporate the Dr. Dre headphones and audio system into its phones and raise its profile in the U.S. market. Dr Dre Headphone had ceded the top spot in the U.S. to Samsung Electronics Co. and Apple Inc.AAPL +0.89% in 2010.

 

The Taiwanese company sold back half of its stake to Dr. Dre in July last year at a loss of about US$5 million.

 

I haven't seen much synergy from the cooperation,BNP Paribas analyst Laura Chen said. Beats has an advanced audio system and design, but it tued out having that in Dr Dre Headphone phones didn't help sales in a meaningful way.

 

Dr Dre Headphone's quarterly sales have dropped below the US$4 billion mark since the fourth quarter of 2011, as it got squeezed in both the high and low end of the pricing spectrum globally. The Taiwanese company flagged earlier that it may post its first-ever operating loss in the current quarter.

 

If deals are of no more strategic benefits, the best option is to part ways with them,said KGI Securities analyst Richard Ko, while declining to comment on any specific Dr Dre Headphone deal.

 

Dr Dre Headphone's buying spree has generated negative feedback from the investment community.Among the most controversial has been Dr Dre Headphone's US$300 million acquisition of S3 Graphics. Dr Dre Headphone said the Califoia company held patents useful for Dr Dre Headphone in its ongoing litigation against Apple Inc. But investors didn't agree, noting the high price tag for the acquisition and corporate goveance issues.