Headphones maker Beats Electronics is reportedly looking to buy-out HTC’s 25 per cent stake in the company, as it looks to bring in new investors who can provide new funds for growth.

The troubled smartphone maker first took a 50 per cent economic stake in the venture in August 2011, describing the deal as a “strategic partnership and investment”.

But it cut this to 50 per cent in July 2012, in a move said to provide Beats with “more flexibility for global expansion”, while maintaining  commercial exclusivity in the mobile space.

Beats’ audio technology – and branding – has been a feature of a range of HTC smartphones announced subsequently.

HTC has seen a change of fortune in recent years, with the smartphone pioneer struggling in the face of competition from a number of rivals.

The company has forecast that the current quarter will see its first loss, as it clears the deck for the launch of new mass-market devices intended to help it rebuild market share.

Contrastingly, the Wall Street Journal said that Beats is looking to broaden its portfolio to include speakers, in-car audio, and an online streaming service.

According to the report, Beats shelved a previous fund-raising round after investors questioned whether its success is a short-term trend or a longer term proposition – and the terms of the deal, which could have seen a large dividend paid to shareholders, were also a sticking point.

By buying-out HTC, it could offer a significant minority shareholding to investors, without needing to dilute the stakes of founders Jimmy Iovine and Andre Young (better known as Dr Dre).