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Apple Confirms Its $3 Billion Deal for Beats Electronics

nytimes.com

41–50 of 351 posts

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

#41

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…

> Beats is inferior to Spotify (or other competition such as Rdio) in my opinion.

> 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.

By comparison, I am a Spotify subscriber, and Spotify until recently didn't even have a way to 'save' albums wholesale (which is my preferred way of listening to music). Instead, you had to save each album as its own unique playlist, which got old fast. Now they have introduced a way of 'saving' albums and browsing through them by artist/album/song, but this new feature still hasn't propagated to all their clients (e.g. their Roku client). So it's not like Spotify is that much better.

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

#42
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…

> 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.

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

#43

Earlier quoted context omitted.

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 throug…

To shuffle a playlist, you actually have to hit the play button for the playlist so it begins playing in order. Then, you enable the shuffle feature in the now playing screen, and then you can skip past the first track to a random one.

I just checked and don't see any specific shuffle buttons, but if there's one I'm not seeing then that'd make me happier.

It's not a huge deal, but it's still one of those things I shouldn't have to do manually in this day and age-- shuffle is a rather standard feature.

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

#44
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…

> reinvented the higher-end headphone market.

Rebranded mid-range electronics with pop star endorsements and hype.

Do people really consider Beats to be high end?

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

#45
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.

ehhh i understand where you are coming from, i mean honestly there are multiple existing Hip Hop Billionaires. They are the owners of the record labels, radio stations, etc. Dre is really 'just' the first hip hop artist to make a billion. And from what is currently known, he wont really be a billionaire after the deal. really its just a case of hip hop bragadocio

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

#46
post #3

Interesting that they closed the deal and announced it before the WWDC Keynote on Monday.

It's not really an announcement for a developer conference. Plus aren't these things typically announced after the markets close (which wouldn't be possible at WWDC)?

Eh, Apple is Apple. They announced iTunes Radio at WWDC 2013, and that doesn't have an API or anything for developers.

And I'm not sure about announcing acquisitions outside of market hours. Apple does plenty of acquisitions that they never announce. Beats would probably need to announce being acquired if they were a public company, but they aren't.

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

#47

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 sen…

>> "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."

I don't see how these numbers are useful. Beats is US only right now and has only been around a few months. Spotify has been around 6 years and is available in a huge number of countries.

Also - Beats doesn't have a free option which will probably stop a lot of people trying it.

At this point it doesn't really matter. Apple is late enough to the game that they don't have time to wait another 2 years while they build a good streaming service. Purchasing was the only way to get to market fast and what better than an established music brand, with the deals and software, just launched so that they can make whatever changes they want without too much uproar.

The money the headphone business makes for Beats really helps justify the deal though. Even if things flop with the music streaming service they can make their $3bn back relatively quickly through headphone sales.

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

#48

"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).

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

#49
post #35

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 sen…

Except the majority of Beats headphones sold are much less than $450. Looking around, most of the catalog is $250 or less. Even the article says "up to $450".

The replica makers, I wonder what their profit margin would be on a pair of $450 headphones.

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

#50
post #44
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…

> reinvented the higher-end headphone market. Rebranded mid-range electronics with pop star endorsements and hype. Do people really consider Beats to be high end?

s/high end/costly/
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