Apple buying Beats (?!)

[Knavish]

http://tech.fortune.cnn.com/2014/05/08/apple-reportedly-buying-beats-for-3-2-billion/

Is that really true? Maybe it's a late April Fool's joke? It's amazing that a brand like Beats is really worth that much money, especially since it does not bring any technology to the table. I can't see an Apple from a few years ago doing this, but I guess the modern Apple is different.

Just as soon as people decide (again) that big clunky headphones make you look silly in public, that "b" logo is going to be a $3 billion waste.
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Edit: Sorry if this should have been in the A/V & HT forum. Seems like beats and Apple belong more in mobile devices.

 

[Ravynmagi]

Seems like a weird move by Apple. Almost feels like a desperate attempt to try to seem cool again. Certainly a sign Apple's trendy image has fallen quite a bit if they feel the need to buy Beats to prop it up.

 

[zerogear]

Seems like it fits into Apple's target market. People who pay $$$ for mediocre things.

 

[sweenish]

It's far less about clunky headhphones, but more the fact that for the price, beats are trash. Add to that the s-curve they apply to EQ, and it's obvious the people buying beats are doing it for status and not audio quality.

And that bit about status is probably why apple is interested. An iWhatever isn't quite the status symbol it used to be.

 

[AstroManLuca]

Seems like it fits into Apple's target market. People who pay $$$ for mediocre things.

this

 

[Zaap]

Can't be true. That would be pretty much the lamest thing Apple has ever done. My personal respect for the company would nosedive.

I know they have tons of cash on hand, but using it to buy someone else's overpriced hipster-wanna be emblem would just be a crazy move.

 

[AstroManLuca]

Can't be true. That would be pretty much the lamest thing Apple has ever done. My personal respect for the company would nosedive.

It hasn't already?

I know they have tons of cash on hand, but using it to buy someone else's overpriced hipster-wanna be emblem would just be a crazy move.

That's basically what Apple already is.

 

[Belegost]

I don't think Apple has any interest in the headphone division. I think this is about bringing in Iovine and the recording industry contacts he has.

Everything I've read suggests that Beats got some pretty cushy deals on licensing for their music streaming service, likely due to Beats having an insider position in the industry. If Apple can leverage that for iTunes they stand to improve margins and increase catalog.

Let's hope they terminate the hardware division with extreme prejudice. I've never heard such overpriced crap, not even from Bose which had become pretty much the epitome of underpeforming overpriced headphones.

 

[WelshBloke]

I really dont understand this.

It cant be for the brand because Apple is one of the biggest brands there is. Do Apple make and sell anything under a different brand name?
It cant be for any technical reasons surely, I'm pretty certain that Apple has the technical chops to make decent, high end headphones if they want and if they dont theres probably older companies with a lot more IP they could have bought.

It could be what Belegost said but doesnt iTunes have a lot of leverage already and would Beats bring much influence if it wasnt run by the same people?

It'll be interesting to see what shakes out anyway.

Hope it doesnt go the way it went for HTC.

 

[bearxor]

I don't think Apple has any interest in the headphone division. I think this is about bringing in Iovine and the recording industry contacts he has.

Everything I've read suggests that Beats got some pretty cushy deals on licensing for their music streaming service, likely due to Beats having an insider position in the industry. If Apple can leverage that for iTunes they stand to improve margins and increase catalog.

Let's hope they terminate the hardware division with extreme prejudice. I've never heard such overpriced crap, not even from Bose which had become pretty much the epitome of underpeforming overpriced headphones.

This is my thought. If this turns out to be true, Apple has to be after the contracts for the streaming service as opposed to the actual headphones.

 

[WelshBloke]

This is my thought. If this turns out to be true, Apple has to be after the contracts for the streaming service as opposed to the actual headphones.

It is the only thing that makes any sense but $3 billion should have been able to buy a lot of contracts.

 

[bearxor]

Depends on how sweet the deals with Beats has with the record companies are and for how long the contracts are.

If Apple picks up dirt cheap streaming rights for 10+ years, I'd imagine this acquisition would more than pay for itself.

But obviously we'd need more detail than what we have.

 

[s44]

I guess they've finally run out of *white* trendbots to fleece?

Seriously, this is a shark-jumping moment. Repeating a failed move made by HTC of all things!?

 

[desura]

Can't be true. That would be pretty much the lamest thing Apple has ever done. My personal respect for the company would nosedive.

I know they have tons of cash on hand, but using it to buy someone else's overpriced hipster-wanna be emblem would just be a crazy move.

beats arent really hipster.

they're more for pudgy white dudes who gush about the chronic album while working at best buy.

yes, my respect for apple is nosediving with this purchase also.

 

[preslove]

It is the only thing that makes any sense but $3 billion should have been able to buy a lot of contracts.

Sure, but if they continue to sell the headphones to recoup their investment money, then the contracts will become cheaper over time.

Also, those contracts weren't necessarily for sale.

 

[Capt Caveman]

http://tech.fortune.cnn.com/2014/05/08/apple-reportedly-buying-beats-for-3-2-billion/

Is that really true? Maybe it's a late April Fool's joke? It's amazing that a brand like Beats is really worth that much money, especially since it does not bring any technology to the table. I can't see an Apple from a few years ago doing this, but I guess the modern Apple is different.

Just as soon as people decide (again) that big clunky headphones make you look silly in public, that "b" logo is going to be a $3 billion waste.
----
Edit: Sorry if this should have been in the A/V & HT forum. Seems like beats and Apple belong more in mobile devices.

You seem to forget their music streaming service which Apple wanted.

 

[WelshBloke]

Sure, but if they continue to sell the headphones to recoup their investment money, then the contracts will become cheaper over time.

Does Apple sell stuff under a different brand name or would this be a new thing for them?

You seem to forget their music streaming service which Apple wanted.

I dont think Apple needed to buy Beats to set up a streaming music service. They must dwarf Beats in their network capabilities.

 

[bearxor]

I dont think Apple needed to buy Beats to set up a streaming music service. They must dwarf Beats in their network capabilities.

The last I've heard, all of the major record labels have a cold relationship with Apple right now. Apple is using it's market share to try and strong arm the rates that they want and the labels are presenting a unified front to establish their terms to Apple.

So coming in the back way makes complete sense to me. I'm sure Apple will keep the beats name alive and still produce some headphone/earbuds but I think we should probably wait until the deal closes and Apple actually releases whatever they're going to using the beats name before we start saying it's a "shark jumping" moment.

 

[WelshBloke]

The last I've heard, all of the major record labels have a cold relationship with Apple right now. Apple is using it's market share to try and strong arm the rates that they want and the labels are presenting a unified front to establish their terms to Apple.

How would this help though? Apple cant change the terms of the existing contracts so thell end up paying what the industry was happy to pay Beats in the first place, Apple could have just offered that.

So coming in the back way makes complete sense to me. I'm sure Apple will keep the beats name alive and still produce some headphone/earbuds but I think we should probably wait until the deal closes and Apple actually releases whatever they're going to using the beats name before we start saying it's a "shark jumping" moment.

I dont think this will be anywhere near a shark jumping moment, Apple are a savvy company. Apple will have their reasons and they will no doubt be carefully considered.

I'd like to ask again if Apple have ever sold stuff under a different brand than theirs though, that seems a departure from their normal MO.

 

[Knavish]

You seem to forget their music streaming service which Apple wanted.

More specifically, I was referring to intellectual property, patents, or technical expertise not already available at Apple. Apple has a significant amount of technical know how and infrastructure to support streaming. The Beats service apparently doesn't have many users, either. Like someone said above, perhaps Beats has some great music streaming contracts that the recording industry mistakenly made transferable to other corporations.

 

[Shlong]

The Beats streaming service works pretty well. Apple could build out their own but with the cash hoard they have, why not buy something that's already established and works? The headphones is a profitable business and it's more of a fashion symbol (like Apple products), so the marriage makes sense.

 

[WelshBloke]

The Beats streaming service works pretty well. Apple could build out their own but with the cash hoard they have, why not buy something that's already established and works? The headphones is a profitable business and it's more of a fashion symbol (like Apple products), so the marriage makes sense.

It isnt a marriage though, unless Apple are changing the way they normally operate.

 

[Zaap]

beats arent really hipster.

they're more for pudgy white dudes who gush about the chronic album while working at best buy.

Pretty good summary.

This seems to me more like a move some cheeseball company like HP would pull.

I guess others are right, it must be for more behind the scenes motivation than actually wanting the (lameass) brand image. Still seems like a collosally stupid move to me.

Can Apple just hold it together. A month away from 7x current shares. Don't screw it up, Apple. $100 per share by November.

 

[Ns1]

the beats music service is a billion times better than iTunes radio.

if Facebook can buy whatsapp for 19 BILLION, 3.2 billion for Beats sounds ridiculously cheap.

 

[WelshBloke]

the beats music service is a billion times better than iTunes radio.

if Facebook can buy whatsapp for 19 BILLION, 3.2 billion for Beats sounds ridiculously cheap.

There's a difference in that Apple live by not diluting their brand, it will be wierd if they suddenly start having different brand images for different product lines.