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

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

#201

Post by notahacker » Wed, May 28, 2014, 10:30 PM UTC

panabee wrote: post #132

gareim wrote: post #8

Earlier quoted context omitted.

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...

Acquihires are by definition evaluated on the perceived market value of the team, which is very rarely proportional to the cash reserves of the buyer. The existence of wealthy suitors like AAPL might shift market values (for any prospective buyer) for tech talent upwards, but no matter how much cash they have in the bank, AAPL can certainly acquihire top talent in the $30m range if that talent is showcasing their skills at unprofitable startups rather than highly profitable brands, in much the same way as they have no need to offer employees salaries' two orders of magnitude more than comparable level employees at companies with a mere $1.6M in the bank.

It would have to be seriously impressive talent to be worth $1.6Bn when you compare it with what Apple paid for NeXT...

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

#202

Post by aaronbrethorst » Wed, May 28, 2014, 10:31 PM UTC

goatforce5 wrote: post #106

6thSigma wrote: post #37

I would have never guessed that Apple's largest acquisition ever would be Beats.

Their largest acquisition so far . (Was Apple's purchase of NeXT bigger than this deal relative to their value at the time?)

AAPL had a market cap of about $20bn on December 20, 1996 when they acquired NeXT for $429mm + 1.5mm shares of AAPL (the share price on 12/20/96 was $23.50). So the deal had a total value of $464.25mm, or about 2.5% of AAPL's market cap. $3bn out of $537bn is a couple orders of magnitude smaller.

sources: http://en.wikipedia.org/wiki/NeXT#1996:_After_NeXT, https://www.google.com/finance?q=AAPL and some arithmetic.

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

#203

Post by 001sky » Wed, May 28, 2014, 10:31 PM UTC

dublinben wrote: post #186

B-Con wrote: post #141

Earlier quoted context omitted.

It's plummeting because it's run by in outdated ways by companies that haven't adapted to new technology. A forward-thinking company that embraces technology would have some advantages.

A company like Pandora or Spotify? Two debt-financed companies that still can't turn a profit from music.

Pandora and spotify are structurally unprofitable because of their licensing problems/payments. Apple is %500Bn company-- big enough to become a label--has the marketing expertise (iTunes) and Capital ($X0Bns cash) to be a next-generation 'label'. Or maybe I'm missing something?

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

#204

Post by abalone » Wed, May 28, 2014, 10:33 PM UTC

JumpCrisscross wrote: post #136

swombat wrote: post #130

Earlier 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

The main evidence you give in support of that claim is that the service doesn't have a lot of customers. But that is true for literally just about every other Apple acquisition. Apple buys technology and talent in the early stages or in component form. Like Tim Cook said there's 70+ other examples of tech & talent acquisitions to look at, and this is just another one of them.

It makes sense financially for Apple, sure, but only in the sense that it doesn't lose them money to purchase the attached headphones business. That business would not even register as a blip in their future growth to be the main goal of the deal.

His other quote was how he was looking forward to Iovine & Dre working on revolutionizing the music industry. That's not about headphones.

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

#205

Post by neura » Wed, May 28, 2014, 10:35 PM UTC

dublinben wrote: post #186

B-Con wrote: post #141

Earlier quoted context omitted.

It's plummeting because it's run by in outdated ways by companies that haven't adapted to new technology. A forward-thinking company that embraces technology would have some advantages.

A company like Pandora or Spotify? Two debt-financed companies that still can't turn a profit from music.

Neither of which also sell music in their own online stores, so it's hard to make a fair comparison.

Also, Apple's iRadio is probably not taking off as well as they'd like and Beats Music already has a better feature set.

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

#206

Post by grimtrigger » Wed, May 28, 2014, 10:37 PM UTC

callmeed wrote: post #198

Honest question: is there a statute of limitations on what the tech world will tolerate with regards to misogynistic behavior (or bad behavior in general)? Or do people just pick and choose what they want to fight? I ask because everyone rallied behind RadiumOne's CEO being canned after he beat up his girlfriend [0]. Similar with the Mozilla CEO (granted, the offense was different ... but it's interesting to point ou…

Side point: beating up a female reporter doesn't make you a mysogynist (it makes you an asshole). Wasn't sure what you meant because of your wording.

Our tolerance for entertainers seems to be much higher than for executives. And I doubt many in the tech world think of Dre as a "real" executive. He's there for marketing reasons, but doesn't have much oversight of the day-to-day and the damage he can do is limited. This perception might be wrong.

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

#207

Post by callmeed » Wed, May 28, 2014, 10:38 PM UTC

grimtrigger wrote: post #206

callmeed wrote: post #198

Honest question: is there a statute of limitations on what the tech world will tolerate with regards to misogynistic behavior (or bad behavior in general)? Or do people just pick and choose what they want to fight? I ask because everyone rallied behind RadiumOne's CEO being canned after he beat up his girlfriend [0]. Similar with the Mozilla CEO (granted, the offense was different ... but it's interesting to point ou…

Side point: beating up a female reporter doesn't make you a mysogynist (it makes you an asshole). Wasn't sure what you meant because of your wording. Our tolerance for entertainers seems to be much higher than for executives. And I doubt many in the tech world think of Dre as a "real" executive. He's there for marketing reasons, but doesn't have much oversight of the day-to-day and the damage he can do is limited. Th…

> beating up a female reporter doesn't make you a mysogynist

I guess I used that phrase because that's how everyone framed the Gurbaksh Chahal incident. At least in my Twitter feed.

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

#208

Post by smegel » Wed, May 28, 2014, 10:39 PM UTC

callmeed wrote: post #198

Honest question: is there a statute of limitations on what the tech world will tolerate with regards to misogynistic behavior (or bad behavior in general)? Or do people just pick and choose what they want to fight? I ask because everyone rallied behind RadiumOne's CEO being canned after he beat up his girlfriend [0]. Similar with the Mozilla CEO (granted, the offense was different ... but it's interesting to point ou…

Sad this is the top comment in this page. Is feminism really the most important issue for a hacker community?

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

#209

Post by bitserf » Wed, May 28, 2014, 10:40 PM UTC

SoftwareMaven wrote: post #173

samstave wrote: post #155

Earlier quoted context omitted.

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.

In general, perhaps not, but for a specific example, iCloud storage.

At a minimum, there should be enough storage for a full backup of each device.

NZ$125/year for 50GB is, to put it mildly, somewhat subpar.

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

#210

Post by mikeloeb » Wed, May 28, 2014, 10:41 PM UTC

sz4kerto wrote: post #113

baddox wrote: post #55

Earlier quoted context omitted.

That doesn't mean they're not part of the higher-end headphone market .

High-end is a sonic category, not a price category. There are extremely expensive audio systems that are targeted towards concerts, etc..

One thing I've learned over the last 10 years in the tech world vs. the last 25 years in it, is that the mainstream (via its marketing catalyst) will override traditionally-held beliefs about the uses of technology and the words used to describe it.

Hence the public talking about "wifi" instead of "wireless ethernet connected to the internet."

The public doesn't know and doesn't respect the world as it was before the products became available which they feel express themselves.

I am/was with you in believing that high price doesn't mean "high-end," but that association has now become useless for communicating with the rest of the world.

The same can be said for the word "decimate." I've given up trying to use it properly and/or correct anyone. It's over. Also using "data" as plural. The world doesn't want a plan, it wants a dream.