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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

#21

Post by espitia »

k-mcgrady wrote: post #9
jaxytee wrote: post #2

Depending on the details of the deal, this may make Dr Dre hip hop's first billionaire.

When the rumour was $3.2bn he wasn't going to become a billionaire despite his video stating his was - so now the price has dropped he certainly isn't one. Also - what does Beats have to do with his career in hip hop? Hip hop didn't make him almost $1bn, an electronics company he co-founded did. It just irks me every time I see 'hip hops first billionaire'. It has absolutely nothing to do with hip hop.

Hip hop is his origin, therefore he is the first hip hop millionaire. Kind of like saying I'm the first billionaire from insert city.

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

#23

Post by JumpCrisscross »

The meat of this deal isn't likely the streaming service. Beats Music had only 111,000 subscribers as of March [1]. Compare that to Spotify's 10 million paying subscribers, 30 million non-paying users, and $4 billion valuation.

The deal's financial logic is driven by Beats's $1.3 billion business (in 2013) of selling high-priced headphones. Given Apple's P/E ratio of 14.9x earnings [2], the acquisition would make sense so long as Beats were running at least a 15% profit margin on those headphones. That's a surer basis for a $3 billion bet than a nascent streaming service.

[1] http://nypost.com/2014/05/27/apple-cuts-purchase-price-of-be...

[2] https://www.google.com/finance?q=aapl&ei=_0qGU5C_BabzsgeenYH...

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

#25

Post by gareim »

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 created his own headphones and music streaming service?

I'm willing to bet anything this is going to be seen as where Apple's golden age began to wane.

EDIT: I said "higher-end" because it's perceived to be, even though audiophiles would never agree. The consumer market believes that Beats and Bose are king though. That's another reason that I'm against this purchase; Apple isn't even buying anything technically higher end (Sennheiser, Beyerdynamic, HiFiMan, what have you).

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

#26

Post by Osmium »

izzydata wrote: post #17

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

What's uncontroversial about that? The iTunes Store did make (legal) digital music mainstream. That's not to say it was the first store of its kind, but it was certainly the first to have widespread success.

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

#28

Post by k-mcgrady »

andrewmunsell wrote: post #16
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…

Interestingly, I find the exact opposite-- Beats is inferior to Spotify (or other competition such as Rdio) in my opinion. This isn't necessarily because of the curated playlists, but it's the service as a whole. Beats is quite rudimentary in terms of music management, and requires way too many taps to add multiple songs to playlists or even just shuffle play a playlist. When I'm trying to listen to music I know I li…

Obviously people have their preferences but there is a point you made that puzzle me:

>> "too many taps to[...]just shuffle play a playlist."

I don't have my phone on my but isn't there just a shuffle button on the play screen and I thought another one at the top of a playlist?

Personally I have an account with Beats and Spotify. I keep my Spotify one for desktop usage. I don't like using any streaming service through the browser but Beats really sucks atm. I have problems with songs not playing again after I've paused.

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

#30

Post by v3rt »

izzydata wrote: post #17

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

I think he's getting at the fact that the iPod and iTunes were what first made people think of music in digital terms. An audio CD might as well be analog as far as people's perception goes, since until MP3 players came around, ripping CDs was not the typical use case.
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