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Apple Confirms Its $3 Billion Deal for Beats Electronics

nytimes.com

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

#151

Post by jseliger »

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…

The consumer market believes that Beats and Bose are king though

To be fair, from what I've read Bose has the best noise cancelling system, albeit at a high price.

I'm not incredibly persnickety about audio quality and don't think I can tell the difference among various "good" headphones. But I have a pair of Bose headphones and like them.

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

#152

Post by georgemcbay »

broabprobe wrote: post #129
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…

Didn't they sign an agreement with Apple Records that they would not start a record label?

At one point they had such an agreement, but according to wikipedia, Apple Inc (the iPhone people) bought the trademark rights to "Apple" outright and relicensed them back to Apple Corps (the record people) as of 2007:

http://en.wikipedia.org/wiki/Apple_Corps_v._Apple_Computer

Which presumably means they are free to do basically whatever they want with regards to using the Apple name on music-related goods and services.

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

#153

Post by smackfu »

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.

If it was company X that was doing the acquisition, no one would care too much. It's the Apple involvement that makes it confounding, since Apple doesn't do acquisitions of this sort. They don't buy brands, they buy tech or people.

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

#154

Post by jsz0 »

I think the key to this deal was the Beats brand. Apple was facing a very difficult task in trying to modernize/redefine the iTunes Store. They attempted to bolt on various new things like Ping, iTunes Match, iTunes Radio, etc but it ended up being a convoluted mess. Too much legacy baggage there. I suspect Apple will preserve the Beats brand and use it as the launching pad for all their next-generation media services/products. iTunes Store will continue on as the place you go to buy things while Beats will clearly be the place you go to stream things.

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

#155

Post by samstave »

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.

Apple made 170 Billion dollars last year. They are insane not to try to spend chump change on the music industry. The own the delivery of sound from that industry INTO a vast % of the consumers of it.

Apple is going to own the entire experience of media consumption for some % of their customer base.

They will be the label, the distribution, the hardware and the content. A 100% apple audio feed, all wrapped up in a tight little box tied directly to your bank account. Every click costs you something.

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

#156

Post by dclowd9901 »

sehr wrote: post #102
jotm wrote: post #79

Earlier quoted context omitted.

Not really true - Sony and Sennheiser (as well as AKG and other less known companies) had the market covered already.

I'd be willing to bet a lot of money that most youth weren't begging their parents for $300 headphones before Beats came along.

It hadn't occurred to me until I've been reading through these postings, but it's true: high-end, expensive headphones have traditionally be tragically ugly, almost as though it was a badge of honor to suffer the ugly headphones, because one knew they were getting superior sound quality.

While I'm still such a fan of sound quality that I will continue purchasing terrible-looking headphones, I can't deny that Beats are sexy as hell.

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

#157

Post by onedev »

The amount of people in this thread who are unable to understand the brilliance of this deal is astounding.

What they bought is not one thing, but all the components that came together in the right way, at the right time.

* Beats Music, a music service that is truly different from the others and is in my opinion better in many ways.

* Legendary founder of Interscope records Jimmy Iovine (who then ran it for 25 years) as part of Apple management.

* Dr. Dre, enough said.

* The amazing people behind the curation of the playlists on Beats Music.

* A powerful brand, though this part is still a grey area for me. It remains to be seen how they handle the brand.

* A strong command of the market. In 2012, NPD Group reported that Beats had a market share of 64% in the U.S for headphones priced higher than $100. It's likely even higher now.

* Hardware that's flying off the shelves as noted above. They have the opportunity to improve the engineering of this hardware to make a truly great product while retaining the amazing branding.

All of those things came together into one place in one deal. It's incredibly smart.

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

#159

Post by izzydata »

tantalor wrote: post #48
izzydata wrote: post #17

"Apple, the company that turned digital music into a mainstream phenomenon" Is this guy serious?

I think the author is referring to digital music stored in electronic storage (e.g. flash memory, hard drive) versus physical media (e.g. compact disc).

Sure, the author may of had the right intentions, but in the end after everyone has read that statement there will be plenty of people that take away from it that Apple invented digital music. Wording is important.

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

#160

Post by samstave »

onedev wrote: post #157

The amount of people in this thread who are unable to understand the brilliance of this deal is astounding. What they bought is not one thing, but all the components that came together in the right way, at the right time. * Beats Music, a music service that is truly different from the others and is in my opinion better in many ways. * Legendary founder of Interscope records Jimmy Iovine (who then ran it for 25 years)…

Apple made 170 Billion dollars last year. They are insane not to try to spend chump change on the music industry. The own the delivery of sound from that industry INTO a vast % of the consumers of it. Apple is going to own the entire experience of media consumption for some % of their customer base. They will be the label, the distribution, the hardware and the content. A 100% apple audio feed, all wrapped up in a tight little box tied directly to your bank account. Every click costs you something.
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