Apple Close to Buying Beats Electronics for $3.2 Billion(forbes.com)
forbes.com
Apple Close to Buying Beats Electronics for $3.2 Billion
http://www.forbes.com/sites/briansolomon/2014/05/08/report-apple-closing-in-on-dr-dres-beats-for-3-2-billion/
20 comments
Unlike most Silicon Valley acquisitions, Beats has profits. They sell high-margin headphones with 60% market share of the over-$100 headphone market. Apple is going to be getting into wearables, and this is the original wearable. They'll probably continue to run the unit separately because the brand is too valuable to just throw away. Audiophiles can pan the headphones as much as they want, it won't be any different from when PC geeks proclaimed they could build a PC with better parts for less without paying the "Apple tax". They aren't relevant. And if the margins are as high as some claim, Apple would have all the flexibility to improve the Beats line with better materials and construction.
http://www.fastcompany.com/3015051/major-beats-beats-electro...
http://www.fastcompany.com/3015051/major-beats-beats-electro...
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In regards to Beats' profits, I believe Beats, much like Apple, is a brand who's value is pinned largely to the guy who's at the head of the ship. With Apple, people knew that Steve Jobs had amazing stylistic and functional taste in products. Because nothing was produced while he was at the helm without first being approved by him, people could trust that each iteration of product line was something they would want by nature, the only question would be whether or not they wanted it enough to pay the premium.
When Steve passed(RIP), Apple took a large hit to their product appeal (which I don't believe has yet been fully realized) because while Apple can still make high quality products, they don't have Steve Jobs, the guru of computer style, there to give his stamp of approval that not only is this the high quality product you've come to expect from Apple but it is also designed for use by humans and "cool".
Next, Apple brought its tastes/decisions into question with the changes to the iPhone design and iOS, the introduction of the iPad mini... a lot of things that beg the question, "Would Steve have really gone for this?"
Enter Beats by Dre, another brand that seems to have its value pegged to the guy who appears to be giving final approval to the products, so much so that he put his name is on all of his products. It has been confirmed that Beats makes great products, so people now trust the brand. They can go into the store and pick up the newest whatever by Beats and can rest assured that it's going to be not only very high quality audio, but it also has Dre's signature that the component ain't nuthin' but a G thang.
Like you said, Beats has profits. There is no real reason for them to want to sell except that they want to get out while they're in a strong position. My guess would be that Dre feels that he's done enough good work and he wants to get out for a boat-load of money so he can start another venture or focus on making music.
There's no real reason for Dre to stay with Beats if its acquired unless it's part of the deal, but if that was the case one would again wonder why the good doctor would be selling the company in the first place. But for Dre, even if he was to retire from the audio component game, his claim to fame would remain untarnished for producing nothing but ultra high quality products. I would imagine the stuff that was produced under him could become collectors items like vintage Nike sneakers. Without him at the head, I see the Beats profits going way down.
It's also funny you bring up the PC/Apple grudge match as I see this acquisition as a deliberate play by Apple against its PC/Android rivals.
Beats by Dre is/was a major feature for companies like HP(computer) and HTC(android). Beats bought out HTC's share of the company to end their partnership, but I'm sure Apple wants to include Beats to their feature list for iPhone and iPad. And HP is one of Apple's most direct competitors on the PC market. Beats is something that HP had that Apple didn't, it was one feature that could be better than Apple's comparative feature for all people knew.
Well that's probably enough ranting so I'm just going to cut myself off. It's 9AM now, must work.
When Steve passed(RIP), Apple took a large hit to their product appeal (which I don't believe has yet been fully realized) because while Apple can still make high quality products, they don't have Steve Jobs, the guru of computer style, there to give his stamp of approval that not only is this the high quality product you've come to expect from Apple but it is also designed for use by humans and "cool".
Next, Apple brought its tastes/decisions into question with the changes to the iPhone design and iOS, the introduction of the iPad mini... a lot of things that beg the question, "Would Steve have really gone for this?"
Enter Beats by Dre, another brand that seems to have its value pegged to the guy who appears to be giving final approval to the products, so much so that he put his name is on all of his products. It has been confirmed that Beats makes great products, so people now trust the brand. They can go into the store and pick up the newest whatever by Beats and can rest assured that it's going to be not only very high quality audio, but it also has Dre's signature that the component ain't nuthin' but a G thang.
Like you said, Beats has profits. There is no real reason for them to want to sell except that they want to get out while they're in a strong position. My guess would be that Dre feels that he's done enough good work and he wants to get out for a boat-load of money so he can start another venture or focus on making music.
There's no real reason for Dre to stay with Beats if its acquired unless it's part of the deal, but if that was the case one would again wonder why the good doctor would be selling the company in the first place. But for Dre, even if he was to retire from the audio component game, his claim to fame would remain untarnished for producing nothing but ultra high quality products. I would imagine the stuff that was produced under him could become collectors items like vintage Nike sneakers. Without him at the head, I see the Beats profits going way down.
It's also funny you bring up the PC/Apple grudge match as I see this acquisition as a deliberate play by Apple against its PC/Android rivals.
Beats by Dre is/was a major feature for companies like HP(computer) and HTC(android). Beats bought out HTC's share of the company to end their partnership, but I'm sure Apple wants to include Beats to their feature list for iPhone and iPad. And HP is one of Apple's most direct competitors on the PC market. Beats is something that HP had that Apple didn't, it was one feature that could be better than Apple's comparative feature for all people knew.
Well that's probably enough ranting so I'm just going to cut myself off. It's 9AM now, must work.
Jimmy Iovine likely got stellar deals with music labels for Beats' streaming service. This is more likely a play for streaming audio than it is for mediocre but well-hyped headphones, which is a lateral move for Apple anyway.
Question is if Beats have the same deal as Lala did: http://thenextweb.com/apple/2010/07/02/streaming-itunes/
Lala's label licenses didn't transfer if the company was bought.
Lala's label licenses didn't transfer if the company was bought.
I'm sure this is about the Beats library deals, and not the products.
I think the Beats products are a strange fit for apple, looks and brand-wise, but i guess they already sell them in their stores so not that big of a stretch.
If I had to guess what design Steve Jobs would have wanted for Apple-branded over-the-ear headphones, I think it would be something like these bowers & wilkins:
http://store.apple.com/us/product/HB920VC/A/bowers-wilkins-p...
I think the Beats products are a strange fit for apple, looks and brand-wise, but i guess they already sell them in their stores so not that big of a stretch.
If I had to guess what design Steve Jobs would have wanted for Apple-branded over-the-ear headphones, I think it would be something like these bowers & wilkins:
http://store.apple.com/us/product/HB920VC/A/bowers-wilkins-p...
As someone who worked sales at Apple's busiest retail store in college a couple years ago, I can tell you anecdotally that they were far and away the best selling third party headphone, deposited being $180-$300 in price, and employees universally pointing customers towards other brands. (They are far and away the worst in any of the price ranges they sold in, and employees don't get commission)
Isn't Apple used to selling highly marked up products to people who want something that "just works"? It doesn't seem to matter if it's the best product or a competitive price.
At least this is a proper money generating business, unlike the useful Whatsapp. I definitely use it a lot, but being acquired for 16B is stretching it...
Well, Apple already has plenty of experience building mediocre headphones. The difference is that Apple only charges $30!
Within the form factor constraints of earbuds and IEMs, you're not likely to find better engineering.
http://www.innerfidelity.com/content/lauding-jobs-least-love...
http://seriousaudioblog.blogspot.com/2013/02/hall-of-fame-ap...
http://www.innerfidelity.com/content/lauding-jobs-least-love...
http://seriousaudioblog.blogspot.com/2013/02/hall-of-fame-ap...
>Within the form factor constraints of earbuds and IEMs, you're not likely to find better engineering.
Not quite. It's easy to find better engineering in the IEM form factor. It's hard to find better engineering in the earbud form factor, because no one bothers trying to make earbuds sound good. It's very hard to make an open device that small sound good.
Not quite. It's easy to find better engineering in the IEM form factor. It's hard to find better engineering in the earbud form factor, because no one bothers trying to make earbuds sound good. It's very hard to make an open device that small sound good.
Thanks for posting those links. I don't think many people have actually compared the Apple ear buds and canalphones to anything.
They are really good value for money, especially if you are after an inline remote. It's difficult to do better without spending more money.
They are really good value for money, especially if you are after an inline remote. It's difficult to do better without spending more money.
>It's difficult to do better without spending more money.
http://www.amazon.com/Klipsch-Image-S4A-In-Ear-Headphones/dp...
Just a little more money. About $15 more, significantly higher quality.
http://www.amazon.com/Klipsch-Image-S4A-In-Ear-Headphones/dp...
Just a little more money. About $15 more, significantly higher quality.
I think that's essentially what was being said already... 50% more expensive, 15% better.
I don't mind the sound as much as the extreme pain they cause my ears after being in for even a short amount of time.
Sennheiser. Excellent engineering and numerous budget options that compete on price and destroy on quality versus Apple.
This strikes me as a bit uncharitable. I can only speak to my experience, but Apple's are the _only_ earbuds I can stand using for any period of time.
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Where could Apple go with headphones? Consider the interest in watches as a more accessible control for iOS devices in pockets or purses.
• iOS control integration with buttons on the cans.
• Touch based rotary controls for volume and scrubbing.
• Integrate a short range Kinect style scanner in the front of a can. Now you can control things with hand gestures in front of your body.
Don't get your hopes up, but it's worth visioning a little. There is a demographic that wears headphones. I'm not able to come up with an information display angle for headphones, but input is good.
• iOS control integration with buttons on the cans.
• Touch based rotary controls for volume and scrubbing.
• Integrate a short range Kinect style scanner in the front of a can. Now you can control things with hand gestures in front of your body.
Don't get your hopes up, but it's worth visioning a little. There is a demographic that wears headphones. I'm not able to come up with an information display angle for headphones, but input is good.
Man Forbes is an annoying site, I try to scroll down to the comments, and before the comments load it jumps to another story.
But anyway, its a bad idea. The sort of people that care about quality know that beats are absolute shit. They get mocked relentlessly. Apple doesn't want to be associated with that.
But anyway, its a bad idea. The sort of people that care about quality know that beats are absolute shit. They get mocked relentlessly. Apple doesn't want to be associated with that.
Apple getting into the headphone market makes sense, they certainly sell a lot of earbuds with their iPods and Iphones. And I could definitely see a more feature packed set of quality headphones being a great idea, there's enough extra space in a pair of studio monitors to cram some electronics. But "Beats By Dre"? These headphones are complete garbage, they are a $25 pair of headphones with the name "Dre" on them and a $150 pricetag. If Apply wants to make a splashy aquisition they should buy Sennheiser, Audio-Technica, Shure or something similar. High quality products with years of audio experience and manufacturing capability.
How many people remember that Beats was created by the same folks who brought us Monster cables? Only they got taken to the cleaners by the current management. This is the company Apple is (apparently) buying for $3.2B. It doesn't seem like a good cultural or strategic fit in any way.
http://gizmodo.com/5981823/beat-by-dre-the-inside-story-of-h...
Also, was it coincidence that Katie Cotton announced her retirement yesterday? I can't imagine what the press release will say...
http://gizmodo.com/5981823/beat-by-dre-the-inside-story-of-h...
Also, was it coincidence that Katie Cotton announced her retirement yesterday? I can't imagine what the press release will say...
See previous thread here: https://news.ycombinator.com/item?id=7718223
Well, this one's not a technical acquisition.
Apple spending money because it can? I would think Apple has plenty of knowledge in the music world and could hire some talented personnel instead of buying an entire company. Beats has value, but I'm not sure if its $3.2B. Their products are okay but not anything segment-leading.
Kind of like the Oculus buy by FB, they have the money...spend it!
Kind of like the Oculus buy by FB, they have the money...spend it!
If this happens my respect for apple falls
I'm guessing that HP won't be having those weird commercials about having beats in them anymore.
I don't see how this makes sense. The headphone business is small. There's no way any favorable music deals would be transferable to Apple. Tim Cook going to Jimmy for creative advice would piss off employees. I don't believe Beats has much IP. Anyone have ideas here?
Beats CEO Jimmy Iovine in Talks to Join Apple as 'Special Adviser'
http://www.macrumors.com/2014/05/08/beats-jimmy-iovine-join-...
http://www.macrumors.com/2014/05/08/beats-jimmy-iovine-join-...
Jimmy Iovine is one ruthless bastard. I'm not sure how I'd feel about him joining Apple.
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If true, they're really buying Jimmy Lovine.
I am not really sure why they want to buy Beat for that price.
What is the strategic advantage in buying Beats?
it probably has more to do with Beats Audio (and by extension, MOG) than with headphone technology. And the Beats brand has a fair amount of value, although i don't think apple really needs that.
For BeatPods by Dre
If this is true, who benefits from leaking it & in what way do they benefit?
I feel like Misfit would have been a better "wearables" acquisition.
WWSJD
I wonder if Apple plans to slap those farcical Beats stickers onto Macbooks and screw up the audio balance in order to "improve" the listening experience (and by "improve" I mean heavily degrade, see HTC's phones).
I won a pair of Beats headphones in a competition. Worth £130 (per Amazon, £200 retail) and in a blind test I prefered my £55 Sony ones. They just sound better, simple as that...