HTC takes stake in Beats Electronics to beef up its audio quality

Manufacturer invests $300m in music tech firm and bags smartphone exclusivity.

HTC has announced a $300 million investment in audio technology firm Beats Electronics, the company behind hip-hop producer Dr Dre's range of branded headphones.

HTC has taken a majority stake in the company according to All Things Digital, which claims the company will now have an exclusive deal to use Beats' technology in its smartphones, although Beats' existing deal to put its tech in HP's TouchPad tablets is unchanged.

"With the magic of mobile devices, it is easier than ever to discover and buy new music," says HTC boss Peter Chou. "However, without great sound experience it is a shame."

Will audio quality become a key differentiator for HTC in the increasingly competitive mobile market? A number of companies - Dolby for example - are also focusing on the space, looking for deals with handset and tablet makers. HTC's strategic investment doesn't quite bring Beats in-house, but it does ensure its tech won't be used by rivals.

Beats was founded by music industry producer Jimmy Iovine.