Even Apple overpay for Beats.

[Ns1]

holy fuck

Apple had more than $130 billion in cash as of the end of March

 

[Ayrahvon]

Seems like a perfect fit to me. Overpriced headphones with inferior sound drivers paired with overpriced computers! May Apple earn all the moneys.

 

[smackababy]

All aluminum.

I have a pair of the first gen beats, and if they were all aluminum, they would exceptional quality. They are plastic (whatever the $300 ones are called) and feel a tad delicate, so I'm careful with them. They haven't broken, but if they were all aluminum instead, they would feel bullet proof.

 

[Lonyo]

holy fuck

They don't really have $130b cash. They have a load of cash that is worth $130b as long as they don't use it in the US.
If it was all brought back to the US it would be significantly less than $130b, which is why they are issuing debt for their share buybacks, because it's cheaper than using their actual cash held overseas which would be hit with a 30% tax or similar. Then they get tax breaks on the interest paid on that debt.

That's also why a Beats purchase at $3.2b could be more like paying $2.3b of "US" cash, if they can use some overseas cash to buy it.

Genius US tax rules.

 

[moonbogg]

Jesus chrimeny what a lesson in name branding. This is why Dre doesn't have to perform any more as he can survive on royalties. While fitty cents vitamin water floundered a bit, beats just keeps growing. Good thing they are not actually the best choice of headphones for their price, I'd feel like a douche wearing them.

Did you actually say "survive"? LOL! Yeah, I'd say being the first billionaire in hip hop might qualify as "surviving". AHAHA!

 

[smackababy]

Did you actually say "survive"? LOL! Yeah, I'd say being the first billionaire in hip hop might qualify as "surviving". AHAHA!

Dre actually sells his production as well. He started his own label and his own headphones company. He was never poor. Even after he left Death Row, with a lot less than he should have, he was never poor.

 

[moonbogg]

Dre actually sells his production as well. He started his own label and his own headphones company. He was never poor. Even after he left Death Row, with a lot less than he should have, he was never poor.

I know I know. Hes always been a great success. I just found it odd to see "Dr. Dre" and "survive" in the same sentence. This man owns. He doesn't survive, he fucking owns.

 

[manly]

They don't really have $130b cash. They have a load of cash that is worth $130b as long as they don't use it in the US.
If it was all brought back to the US it would be significantly less than $130b, which is why they are issuing debt for their share buybacks, because it's cheaper than using their actual cash held overseas which would be hit with a 30% tax or similar. Then they get tax breaks on the interest paid on that debt.

That's also why a Beats purchase at $3.2b could be more like paying $2.3b of "US" cash, if they can use some overseas cash to buy it.

Genius US tax rules.

I think it's closer to $150B now, but yes that money isn't going to be repatriated until Congress passes some tax amnesty legislation.

How do they use overseas cash to buy a U.S. firm? IAN a tax attorney.

 

[Shlong]

They don't really have $130b cash. They have a load of cash that is worth $130b as long as they don't use it in the US.
If it was all brought back to the US it would be significantly less than $130b, which is why they are issuing debt for their share buybacks, because it's cheaper than using their actual cash held overseas which would be hit with a 30% tax or similar. Then they get tax breaks on the interest paid on that debt.

That's also why a Beats purchase at $3.2b could be more like paying $2.3b of "US" cash, if they can use some overseas cash to buy it.

Genius US tax rules.

I don't believe all the cash is held overseas (the vast majority of it is) but I think they have $5 billion or so held in the US.

 

[dr150]

I know I know. Hes always been a great success. I just found it odd to see "Dr. Dre" and "survive" in the same sentence. This man owns. He doesn't survive, he fucking owns.

First Apple...then the Presidency....then the world.

 

[zephyrprime]

Apple's core business is brand value.
Brand value is the only thing that Beats has, and by being able to sell the Beats earbugs to the iphonies, they can make money twice on the same sucker.
Makes perfect sense to me.

This. Apple is all about luxury branding and Beats is exactly that. The audio space is ripe for a high profile, big brand name to come in and make people feel like spending lots of money on things they never knew they needed before until now. Bose tried to do that but they just didn't do a great job of it. I expect Beats branded speakers and accessories soon. Beats headphones will be featured on iphone 6 commercials no doubt.

The middling quality of Beats doesn't matter. All apple has to do is tell their Chinese suppliers to provide higher grade products and they will. It's not like they don't know how - it's just that the consumers are too stupid to know the difference anyway.

 

[smackababy]

I expect Beats branded speakers and accessories soon.

Those already exist.

Beats headphones will be featured on iphone 6 commercials no doubt.

I can see this happening. The standard iBuds will get a 'b' on them and cost an extra $25.

 

[Phoenix86]

I can see this happening. The standard iBuds will get a 'b' on them and cost an extra $25.

This creates a massive problem for them...

iWhatever
'b'
ibeats doesn't really work.

 

[smackababy]

iBeats... my meats?