Apple Confirms Its $3 Billion Deal for Beats Electronics • Hacker News Board

Re: Apple Confirms Its $3 Billion Deal for Beats Electronics

#131

Post by skyebook » Wed, May 28, 2014, 9:22 PM UTC

taylorlapeyre wrote: post #64

sz4kerto wrote: post #42

Earlier quoted context omitted.

> reinvented the higher-end headphone marke There's zero high-endness about Beats headphones. They're all right (at least if they were priced around 30% of their current price), but really, they don't sound particularly good.

It doesn't matter if you're paying for sound quality, fashion, or the brand name. They cost $150-$300. That's higher-end.

Even within Beats own line there are the decidedly "lower" and "higher" end models.

The interesting thing, to me, about this is that Beats (the headphone, not the streaming music service) has the high price and is currently high-school chic, but similar things have been said about Apple. In Apple's case they're aided by the product's function being on par with the design.. The Beats stuff seems to consistently fall short of the quality of sound offered by Sennheiser and Sony's stuff.

Re: Apple Confirms Its $3 Billion Deal for Beats Electronics

#132

Post by panabee » Wed, May 28, 2014, 9:23 PM UTC

gareim wrote: post #8

k-mcgrady wrote: post #5

An important quote from the article: >> “Could Eddy’s team have built a subscription service? Of course,” he said. “We could’ve built those 27 other things ourselves, too. You don’t build everything yourself. It’s not one thing that excites us here. It’s the people. It’s the service.” From my usage of the Beats streaming service it stands head and shoulders above everyone else because of the people it has creating pl…

Even though Cook said it's not about building it, "it's the people. It's the service", is $3 billion worth what is essentially an acquihire? EDIT: Right, it's still a profitable business regardless and I should have touched on that. But I don't want to see big tech companies acquire just for profit. They become behemoths that die slow deaths. I want to see Apple continue to reinvent based on their vision. I don't wan…

setting aside the streaming service and the profitable hardware, bear in mind the context if you evaluate the deal purely as a acquihire. apple has about $160B in cash [1]. $3B for an acquihire is comparable to zynga in 2013 [2] purchasing some startup for $30M.

[1] http://www.businessinsider.com/global-cash-reserves-companie... [2] http://seekingalpha.com/article/1919501-zynga-cash-still-pil...

Re: Apple Confirms Its $3 Billion Deal for Beats Electronics

#133

Post by gnaffle » Wed, May 28, 2014, 9:25 PM UTC

danudey wrote: post #53

gareim wrote: post #25

Apple redefined the mp3 player market, the ultraportable laptop market, the smartphone market, the tablet market, and now they're buying a company that reinvented the higher-end headphone market. Is it smart of a brand that has traditionally created their own iconic images to buy another cultural icon for $3 billion? I don't think so. Maybe this gets used a lot, but would Steve Jobs have done this? Or would he have c…

> would Steve Jobs have done this? Or would he have created his own headphones and music streaming service? I don't know, would he have? You asked the question in such a way as to imply the answer that no, he wouldn't, but you can't actually know that for sure. Also, we shouldn't be holding Apple to the standard of 'Steve Jobs was perfect so if he wouldn't have done this then it's bad'; Jobs made his share of mistake…

We don't know what he would have said, but what he did say before he passed away was that he explicitly didn't want people at Apple to ask what Steve would have done, he wanted them to do what they felt was right.

The deal would make no sense whatsoever if not for the music streaming service. It's interesting that they get the headphone business along with it - my hope is that they will gradually beef up the quality of the headphones in the process.

Re: Apple Confirms Its $3 Billion Deal for Beats Electronics

#134

Post by eghri » Wed, May 28, 2014, 9:25 PM UTC

k-mcgrady wrote: post #15

danhak wrote: post #11

So, Apple acquires music streaming service lala.com in late 2009 for $80 million and shuts it down unceremoniously. Less than 5 years later pays $3 billion for Beats electronics, largely for their music streaming service.

Lala became iTunes Radio AFAIK.

Lala was way more than iTunes radio. It had low priced cloud music purchases (e.g. $0.29 a song), unlimited cloud streaming for MP3's you already owned, free album listens for 1-2 plays, an integrated streaming player for third party sites, and more. It was way ahead of its time and competitors, but it was killed by Apple and used for almost nothing.

Re: Apple Confirms Its $3 Billion Deal for Beats Electronics

#135

Post by __david__ » Wed, May 28, 2014, 9:26 PM UTC

jmelloy wrote: post #58

izzydata wrote: post #34

Earlier quoted context omitted.

CDs are digital music, everyone was listening to digital music before apple did anything. People were using walkmans long before the iPod. The point is trying to credit apple for "digital" music as opposed to "analog" music. That is just absurd. Credit them from making a business out of selling digital music, but not for making digital music popular.

I don't think anybody realistically considers a CD "digital".

Of course they do, in general—there's nothing analog about CDs. But in this context it clearly meant "digital downloads".

Re: Apple Confirms Its $3 Billion Deal for Beats Electronics

#136

Post by JumpCrisscross » Wed, May 28, 2014, 9:26 PM UTC

swombat wrote: post #130

JumpCrisscross wrote: post #119

Earlier quoted context omitted.

Wild hypothesis. Amazon started as a book distributor. Now it is fighting to become a publisher. iTunes + iPod started as a music distributor. What if it now has ambitions as a label? How would one build that out of Cupertino? One would start with a fringe, fragmented genre, to serve as a beachhead. Fragmented by not flat - there should be a node near the top of a hierarchy which can be acquired and leveraged. $1.3 b…

You'd have to be pretty insane to spend $3b to get into the content industry in 2014. First, it's an industry that's been plummeting for a decade, secondly, the entire recording industry is worth about that much, and thirdly, the entire concept of making money from copyrighted works of art is under threat. This theory doesn't hold water, sorry.

The meat of this deal is the headphones business [1]. I'm opining on the transaction's optionality for Apple. A lot of attention has been given to the streaming service. I'm pointing out another joker Apple may have considered to hold, if not immediately play.

[1] https://news.ycombinator.com/item?id=7812793

Re: Apple Confirms Its $3 Billion Deal for Beats Electronics

#137

Post by ghaff » Wed, May 28, 2014, 9:27 PM UTC

smackfu wrote: post #97

gareim wrote: post #25

Apple redefined the mp3 player market, the ultraportable laptop market, the smartphone market, the tablet market, and now they're buying a company that reinvented the higher-end headphone market. Is it smart of a brand that has traditionally created their own iconic images to buy another cultural icon for $3 billion? I don't think so. Maybe this gets used a lot, but would Steve Jobs have done this? Or would he have c…

>I'm willing to bet anything this is going to be seen as where Apple's golden age began to wane. I would argue that they've already been left behind on the music front. iPods are dead, no one wants to buy tracks on iTunes for $1.29, iTunes Radio was too little, too late. A lot of Apple fans are proudly using Spotify or other services on their iPhones. Heck, even the musicians associated with Apple are getting uncool.…

As of about a year ago, Apple was selling about 21 million songs a day. That's a lot of no ones.

http://www.billboard.com/biz/articles/news/1538108/itunes-cr...

That said, Apple hasn't had much impact on other types of music delivery--although it's probably worth noting that the business models associated with those other types of music delivery are a lot less clear than selling individual songs is.

Re: Apple Confirms Its $3 Billion Deal for Beats Electronics

#138

Post by nostromo » Wed, May 28, 2014, 9:27 PM UTC

achompas wrote: post #120

nostromo wrote: post #93

Earlier quoted context omitted.

"Unique" is one way of putting it. Another is "messy." If they wanted the headphones or the talent or the streaming service, they could have bought any one individually, or purchased a number of competing services that are better in each of those spaces. The fact that everyone is so confounded by this acquisition makes me think that Apple purchased something non-public.

I don't believe people are actually confounded by this acquisition. The headphones are wildly profitable and the Beats brand is incredibly strong. This deal is easily justifiable.