Apple Confirms Its $3 Billion Deal for Beats Electronics

Post by JumpCrisscross » Wed, May 28, 2014, 8:59 PM UTC

danudey wrote: post #39

JumpCrisscross wrote: post #23

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…

Your argument makes sense, but it kind of falls apart when you consider that Beats aren't actually good headphones, to the point where The Wirecutter actually did an article[1] where they listed all the various Beats products and then provided examples of better deals (some of them with significantly better quality at half the price). I don't understand why Apple would buy a headphone company that makes pretty but lo…

Post by danudey » Wed, May 28, 2014, 9:00 PM UTC

wmeredith wrote: post #38

izzydata wrote: post #17

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

iTunes is 64% of the digital music market and 29% of all music sold in the world. I don't see what's wrong with that statement.

Post by k-mcgrady » Wed, May 28, 2014, 9:00 PM UTC

free2rhyme214 wrote: post #54

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…

I completely agree with this. Jobs would've already made a subscription service and tried different headphones to sell by now. This is more of an aquihire and it's unimpressive. If you watch MKBHD's videos on youtube, he shows why beats headphones sound good and why there's plenty of others that sound better for a cheaper cost. Basically it's not really a move Jobs would've done but that's what happens when your co-f…

Post by gareim » Wed, May 28, 2014, 9:00 PM UTC

joe_inferno wrote: post #51

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…

"…this is going to be seen as where Apple's golden age began to wane." I heard that kind of talk when Steve died.

Post by jotm » Wed, May 28, 2014, 9:01 PM UTC

apalmer wrote: post #61

sz4kerto wrote: post #42

Earlier quoted context omitted.

> 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.

Factually true, but as they created and own pretty much the entire market for $300 headphones, one has to concede they have the title of high end headphones... high end doesnt necessarily mean highest quality.