I think the 3B would have been put to better use by buying HBO.
I don't see why Time Warner would want to sell its cash cow. Especially for that price.
Apple Confirms Its $3 Billion Deal for Beats Electronics
171–180 of 351 posts
Re: Apple Confirms Its $3 Billion Deal for Beats Electronics
#172Apple 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…
> 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.
I agree 100% You get people listening to Beats headphones that pump so much bass that they destroy the mid and high end. It's stupid to pay that much money for a decidedly low-end product. Just because it's loud doesn't mean it's good. And beyond that, the actual physical quality of Beats headphones is absolute rubbish. I unfortunately bought into the hype my first year of college and picked up a pair and returned them a week later as they were falling apart and sounded like dirt. Bowers and Wilkins are far superior in basically every way.
Re: Apple Confirms Its $3 Billion Deal for Beats Electronics
#173Earlier quoted context omitted.
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 ti…
Apple has never been one to nickle and dime their customers. While I have little doubt the model will have some component of "you pay for what you use", you can be sure it will be done in such a way that 1) much of the cost is buried in the cost of the hardware and 2) if doesn't feel like every click is costing you something.
Re: Apple Confirms Its $3 Billion Deal for Beats Electronics
#174Earlier quoted context omitted.
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
How did you arrive at the 15% margin figure?
Re: Apple Confirms Its $3 Billion Deal for Beats Electronics
#175Earlier quoted context omitted.
They also get the legendary founder of Interscope records (who ran it for 25 years) and Dr. Fucking Dre as part of the deal to serve as Apple management. That's got to worth something.
Yes, but what's the over/under on how long either of them stay? Seems a bit like Michael Ovitz at Disney: he lasted a year.
What if they were given an opportunity and the complete responsibility to build a record label under Apple?
Total end-to-end control of music from creation to consumer listening.
Of course we can keep playing the what-if game, but I think there's a bit more to this deal than meets the eye.
Re: Apple Confirms Its $3 Billion Deal for Beats Electronics
#176Apple 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?
I think so. Apple built the iPod and purchased SoundJam because they realized the world had changed. Buying CDs in stores and feeding them into your CD player was inevitably going to be replaced by digital media players/sales. iPod/iTunes filled this demand for many years but now the world has changed again. People don't spend $200 on iPods anymore but they will spend $200 on Beats headphones. They don't like feeding digital media files into their digital media players -- streaming is much easier. They also don't care much about owning music anymore or understand why a song costs 99 cents when they can goto YouTube and listen to it for free.
Re: Apple Confirms Its $3 Billion Deal for Beats Electronics
#177This could have a mobile angle too. The HTC One was branded with Beats speakers and headphones. Maybe they'll do an iphone with "Beats Audio" rather than wait for another Android phone to have partnered with Beats.
Ugh. This sounds too much like "Intel Inside" - although to be fair, the 20th Anniversary Macintosh (late 1990s) featured a sound system by Bose.
Re: Apple Confirms Its $3 Billion Deal for Beats Electronics
#178Earlier quoted context omitted.
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
How did you arrive at the 15% margin figure?
($3 billion purchase price [1] / 14.9x AAPL P/E ratio [2]) / $1.3 billion 2013 Beats headphone sales [3].
We are asking how much in earnings (E) would Beats need to earn to give a $3 billion price (P) no more than a 14.9x P/E ratio. We then turn those minimum earnings E and turn them into a quick-and-dirty margin by dividing E by sales.
[1] http://www.nytimes.com/2014/05/29/technology/apple-confirms-...
[2] https://www.google.com/finance?q=aapl&ei=_0qGU5C_BabzsgeenYH...
[3] http://nypost.com/2014/05/27/apple-cuts-purchase-price-of-be...
Re: Apple Confirms Its $3 Billion Deal for Beats Electronics
#179"It’s going to be accretive in fiscal year 2015" Damn, http://recode.net/2014/05/28/tim-cook-explains-why-apple-is-...
Re: Apple Confirms Its $3 Billion Deal for Beats Electronics
#180Apple 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 said "higher-end" because it's perceived to be, even though audiophiles would never agree.
Do audiophiles really agree on anything?