Apple buying Beats (?!)

[Red Storm]

I agree on that bit -- Apple has been spending a lot of cash on what ultimately amounts to fending off activist investors like Carl Icahn, who are all about short-term greed.

If you believe Bloomberg, the deal is about tweaking Beats' headphone formula and getting Beats Music's streaming technology. Which is good news, quite frankly. I don't think anyone wanted to see Apple simply rebrand Beats' existing hardware and online service.

(For reference: http://www.bloomberg.com/news/2014-05-12/apple-s-deep-ties-with-iovine-key-driver-of-beats-deal.html )

How and why is it good news when the number of music streaming competitors goes down?

 

[singhh]

Beats may not be the purchase we'd think as Apple making, but when you look at Apple and Beats, they function in a very similar way. Beats and Apple are both relatively exclusive, costly, high-end. They both are beautiful (subjectively speaking), designer items. They both have that aesthetic appeal.

They are basically sisters in terms of style, so it makes sense Apple would want to buy the closest thing to itself. Beats used to be called (and still is) the Apple of music, and now Apple's Beats will be the Apple of music...(!!)

We might not be able to see an immediate benefit, but combining two brands that are essentially perfectly compatible should at least solidify Apple's stance in their leading markets.

edit: Obviously, Apple will benefit directly from Beats' hardware, IP, and software lineups, but it's more than that. Think of Fiat owning Ferrari and Maserati...Maserati isn't a big brand compared to Ferrari, but it solidifies Fiat's control over the Italian hyper-luxury supercar segment.

 

[toughtrasher]

Not sure if anyone has come across this, but if Apple is buying Beats, that means the plethora of Android phones that are "integrated" with Beats will no longer be developed, and I can't help but wonder if this is a marketing scheme by Apple.

 

[lilrayray69]

As brands I think the buy makes sense. As others said, Beats is a designer level headphone which is well built, but the technical specs aren't that great especially for the price. You can get much better sounding headphones for a lot less, but they won't look as sleek and nice. Kind of the same with Apple products.

I only was surprised because headphones never seemed to be a big thing for Apple and their products, they only just recently redesigned their stock headphones after a pretty long time of those very, very basic earbuds. Just seemed to me Apple never cared a lot about sound in general. Curious to see what they'll do with it.

I had too thought it strange that you only see Beats-integration with android devices and sometimes windows laptops. So I guess that will be no more? Not that I really care about that, never bought anything Beats-related.

Still, an interesting move.

 

[Seven]

Nobody cares about the spec anymore and Beats has the fashion and style. That is all needed. Every NBA player has the Beats, pretty much everyone wear them in a gym, so its good enough for people. This totally makes sense.

 

[Seven]

Is Monster Cables next?

I am surprised they are still in business.

 

[desura]

Speaking of the EarPods...

If Apple wanted to, they could probably bundle the dual driver IEM's in every iPhone and still make a tremendous profit. The things sell for $70-$80, probably cost $20 to produce.

The dual driver IEM's were very good sounding.

 

[singhh]

It also could be that Apple simply buys Beats, and let's it sit there for some time. Beats makes $1.5b yearly, so that's a good amount to have coming in without much overhead. I see Apple doing that for maybe 6-12 months, then we'll see Apple start tweaking stuff, like the streaming service. I think it' be foolish to try and change things immediately, especially with an established brand like Beats. Think of Facebook and Instagram and Oculus; everyone freaked out that Fb was going to change stuff, but they left it, and Insta is making more money than ever and Oculus...well...nothing's changed, except for the million angry Kickstarter backers lol.

It's not simply the brand, the licensing deals, or the hardware, it's the combo of them. I can't think of a company that is like Beats in that combo, other than Apple, Mercedes, and a few other brands.

Apple + Beats = 2 Apples, one big, one small.

 

[toughtrasher]

It also could be that Apple simply buys Beats, and let's it sit there for some time. Beats makes $1.5b yearly, so that's a good amount to have coming in without much overhead. I see Apple doing that for maybe 6-12 months, then we'll see Apple start tweaking stuff, like the streaming service. I think it' be foolish to try and change things immediately, especially with an established brand like Beats. Think of Facebook and Instagram and Oculus; everyone freaked out that Fb was going to change stuff, but they left it, and Insta is making more money than ever and Oculus...well...nothing's changed, except for the million angry Kickstarter backers lol.

It's not simply the brand, the licensing deals, or the hardware, it's the combo of them. I can't think of a company that is like Beats in that combo, other than Apple, Mercedes, and a few other brands.

Apple + Beats = 2 Apples, one big, one small.

I doubt they just let it sit there, because it'd take them 2 years to pay off what they bought the company for.

I can imagine them making subtle changes to increase profits and slowly integrate it into their iPhones though

 

[WelshBloke]

Apparently the streaming service had something like 110,000 subscribers.

http://www.phonearena.com/news/Leaked-document-shows-Beats-Music-with-just-111000-subscribers_id56097

As the article says, that works out to be $28,000 per subscriber!

Obviously they weren't buying user numbers.

 

[Eug]

Supposedly, the Beats deal is a little rocky at the moment.

Five Things Holding Up the Apple-Beats Deal

Apple was nowhere near ready to have this news break as it tries to work out what exactly it’s getting for $3.2 billion.

---

Apparently, the Apple family near imploded with outrage when that video went up on Facebook of an ‘excited’ Dr. Dre with R&B singer/former Coca Cola pin-up Tyrese. In the video they share, in language perhaps unsuitable for a family blog, how Dre will be hip-hop’s first billionaire and other nice things about Compton.

 

[WelshBloke]

Apple was nowhere near ready to have this news break as it tries to work out what exactly it’s getting for $3.2 billion.

Not just us then?

 

[BladeVenom]

Maybe someone at Apple came to their senses.

 

[Fingolfin269]

Not happening.

 

[jpeyton]

As much as I hate Apple for their patent litigation, and want them to make a bad multi-billion dollar acquisition on their way down...

...I also think Dre should have kept his mouth shut, and needs to be taught a very expensive lesson.

I could go either way on this one. Win/win for me.

 

[pcsavvy]

Here is another article about Apple being upset with Dre.
http://www.tweaktown.com/news/37967...h-dr-dre-bragging-about-beats-deal/index.html

 

[WelshBloke]

Confirmed?

http://www.bbc.co.uk/news/business-27613243

 

[Phynaz]

The press release
http://www.apple.com/pr/library/2014/05/28Apple-to-Acquire-Beats-Music-Beats-Electronics.html

 

[jpeyton]

So, what's the verdict. Who made a better $3 billion acquisition?

Apple with Beats?

Or Google with Nest?

If nothing else, it illustrates the huge cultural differences between the companies.

 

[WelshBloke]

So, what's the verdict. Who made a better $3 billion acquisition?

Apple with Beats?

Or Google with Nest?

If nothing else, it illustrates the huge cultural differences between the companies.

I'm not sure that either of those are particularly good acquisitions, but then that's probably why I'm not in charge of a massive multinational corporation.

Either way 3 billion is ah heck all to either of those companies.

 

[Crono]

Not sure if anyone has come across this, but if Apple is buying Beats, that means the plethora of Android phones that are "integrated" with Beats will no longer be developed, and I can't help but wonder if this is a marketing scheme by Apple.

Beats on the HTC One was little more than an equalizer. HTC had no problem keeping the same amp (or a better one) with the M8 and dropping the "Beats" name. Plus there are other companies like Harmon Kardon willing to step in and lend their branding. That's most of what Beats was on Android, just branding, aside from their streaming music service. I don't think Beats was doing anything cutting edge as far as music "enhancement".

I can see why Apple wants Beats and I don't doubt it's worth the acquisition price, but it's not like they are the best at anything where headphones, streaming music, or smartphone integration is concerned. It's a valuable brand, though, and I'm sure the combination of resources and talent there can fit with Apple's long term strategy and their own brand.

 

[Suspicious-Teach8788]

I'm not sure that either of those are particularly good acquisitions, but then that's probably why I'm not in charge of a massive multinational corporation.

Either way 3 billion is ah heck all to either of those companies.

I think financially speaking, Apple can turn Beats into a bigger money maker. The two companies are fundamentally different. Nest likely benefits Google greatly too, but not because they're going to be churning out a 10 million Nests a quarter next year. They're buying it for your data so they can be better positioned to integrate into your home in the future. It's more a long game thing.

 

[preslove]

Apple wants Jimmy Iovine and his connections/expertise: http://www.nytimes.com/2014/05/29/b...-beats-lends-apple-a-skilled-ear.html?hp&_r=0

 

[Mopetar]

So, what's the verdict. Who made a better $3 billion acquisition?

Apple with Beats?

Or Google with Nest?

If nothing else, it illustrates the huge cultural differences between the companies.

Apple will probably make more money from theirs, at least in the short term. However, I think Google's prospects with Nest are far more exciting. Beats is an existing market that Apple can grow, but Nest represents a lot of possibility. Even if it doesn't pan out for Google, I think that the money and other engineering talent they can add to Nest over the next several years will really push smart home technology forward.

 

[Commodus]

Nest is potentially more exciting... with that said, Google's track record in home technology isn't exactly great. Android@Home and Nexus Q were pretty much DOA, and Google TV (eventually Android TV) is on life support. For Google to really succeed in this space, it might have to give the Nest team primary control and relegate its own teams to filling in technology gaps.

Apple's deal isn't as exciting, to be sure. However, Apple also isn't Google; it tends to focus on a few things it believes it can do well rather than trying to do absolutely everything. The company isn't doing self-driving cars or high-altitude internet access balloons. Me, I'll be happy if the Beats acquisition leads to a decent on-demand streaming iTunes service, or if it improves the quality of Beats' headphones.