The Taiwanese phone maker said in a Taiwan Stock Exchange filing on Sunday that by selling back the stake, it would retain about 25 percent ownership of Beats, with the remainder about 75 percent stake back in the hands of Beats.

It said in an email that the deal would "provide Beats with more flexibility for global expansion," but also continue to give HTC exclusivity in using Beats' audio products in mobile devices. "HTC and Beats will continue to work closely, including a joint global marketing campaign later this year," the company added.

HTC announced its investment of about in Beats last August, as part of a move to improve the audio on its smartphones. Beats is a company rap artist Dr. Dre helped found, and sells higher-end headphones. The company is selling back its part of the stake for US$150 million.

Following the deal, HTC began bundling Beats headphones with certain smartphones, while also integrating Beats audio technology into the devices.

While HTC said the deal helped create progress in sound innovation, and brand awareness, the partnership between the two companies likely didn't work out, said Teck Zhung Wong, an analyst with research firm IDC.