So Apple Has Bought Beats

[Robin]

For 3.2 BILLION DOLLARS Dre will be laughing all the way to the bank.

Seems like a very questionable move (and the price is crazy). Although both are similar in the fact they have managed to sell style above everything else, Beats seems more of a fad as opposed to Apple who has had much longer staying power and more substance.

Also Beats has no special technology or IP that no one else has... the pretty much don't even make half the stuff that goes into their products. It's value is totally its BRAND.

What Apple are going to do with it will be interesting to see, it might be a move just to ensure no one else can have Beats which is currently licenced out to many tech companies (HP, HTC etc). Often companies will buy something just to neutralise the threat.

I kinda felt that the whole Beat's thing was already over... your not even seeing the stuff in music videos much anymore.

Thoughts?

 

[Azuremen]

The average consumer base still buys up Beats thinking they are something special, the fools.

I feel Jobs is rolling around in his grave, as buying something with no unique quality or innovation just doesn't quite seem his thing. Sure, he loved brand identity and exclusivity, but usually found some unique innovation to also jam in there to justify the exclusive aspect.

 

[gtone339]

Beats by Apple = High Price Accessories!!

 

[MHPALA]

The average consumer base still buys up Beats thinking they are something special, the fools.

I feel Jobs is rolling around in his grave, as buying something with no unique quality or innovation just doesn't quite seem his thing. Sure, he loved brand identity and exclusivity, but usually found some unique innovation to also jam in there to justify the exclusive aspect.

Exactly. They should be buying out a company that produces products with a quality that matches Sennheiser's. Fools.. O.W.H.H (Off With His Head).

 

[Leicht]

Other reason why they bought beats is because of the music subscription thing

 

[boiltheocean]

Other reason why they bought beats is because of the music subscription thing

Which I had never heard of until today. Anyone else the same? Doesn't seem like much of a threat to the behemoth that is iTunes.

 

[Leicht]

Which I had never heard of until today. Anyone else the same? Doesn't seem like much of a threat to the behemoth that is iTunes.

This might be the reason:

And in the longer term, the Beats acquisition could give Apple a music service to rival Spotify. Apple is still the dominant seller of digital music, but the 99-cent downloads that it pioneered are declining as more people turn to streaming services like Pandora and Spotify. Sales of individual songs have declined 12 percent in the past year, according to Nielsen SoundScan. Steve Jobs famously hated the subscription model of online music, but the growth of such services indicates an appetite that Apple may no longer have been able to ignore. ReCode reports that revenues from iTunes Match (a cloud music locker) and iTunes Radio (a Pandora clone) have disappointed the music industry. Meanwhile Beats Music, which launched its all-access music service in January, is said to have acquired fewer than 200,000 followers despite a massive marketing campaign and a number of friendly deals with cellular carriers.

While Apple has dithered with music services, Spotify has expanded aggressively around the world. The Swedish company, which has raised more than $500 million,expanded from 17 to 32 markets last year. It remains unprofitable, and its long-term prospects remain unclear. But its notion of on-demand access to music for a low monthly fee has already converted tens of millions of paying subscribers. Apple may be looking for a fast way to offer its customers a similar service — and with more than 800 million credit cards already on file, it could rapidly eclipse all competitors.

http://www.theverge.com/2014/5/9/5698158/what-apple-is-really-buying-with-beats

 

[TenEightyOne]

Other reason why they bought beats is because of the music subscription thing

Yup, the main acquisition for Apple is the working model and infrastructure for that service. Which I too know nothing about

 

[Leicht]

For 3.2 BILLION DOLLARS Dre will be laughing all the way to the bank.

Seems like a very questionable move (and the price is crazy). Although both are similar in the fact they have managed to sell style above everything else, Beats seems more of a fad as opposed to Apple who has had much longer staying power and more substance.

Also Beats has no special technology or IP that no one else has... the pretty much don't even make half the stuff that goes into their products. It's value is totally its BRAND.

What Apple are going to do with it will be interesting to see, it might be a move just to ensure no one else can have Beats which is currently licenced out to many tech companies (HP, HTC etc). Often companies will buy something just to neutralise the threat.

I kinda felt that the whole Beat's thing was already over... your not even seeing the stuff in music videos much anymore.

Thoughts?

The average consumer base still buys up Beats thinking they are something special, the fools.

I feel Jobs is rolling around in his grave, as buying something with no unique quality or innovation just doesn't quite seem his thing. Sure, he loved brand identity and exclusivity, but usually found some unique innovation to also jam in there to justify the exclusive aspect.

Exactly. They should be buying out a company that produces products with a quality that matches Sennheiser's. Fools.. O.W.H.H (Off With His Head).

This might be the reason:

And in the longer term, the Beats acquisition could give Apple a music service to rival Spotify. Apple is still the dominant seller of digital music, but the 99-cent downloads that it pioneered are declining as more people turn to streaming services like Pandora and Spotify. Sales of individual songs have declined 12 percent in the past year, according to Nielsen SoundScan. Steve Jobs famously hated the subscription model of online music, but the growth of such services indicates an appetite that Apple may no longer have been able to ignore. ReCode reports that revenues from iTunes Match (a cloud music locker) and iTunes Radio (a Pandora clone) have disappointed the music industry. Meanwhile Beats Music, which launched its all-access music service in January, is said to have acquired fewer than 200,000 followers despite a massive marketing campaign and a number of friendly deals with cellular carriers.

While Apple has dithered with music services, Spotify has expanded aggressively around the world. The Swedish company, which has raised more than $500 million,expanded from 17 to 32 markets last year. It remains unprofitable, and its long-term prospects remain unclear. But its notion of on-demand access to music for a low monthly fee has already converted tens of millions of paying subscribers. Apple may be looking for a fast way to offer its customers a similar service — and with more than 800 million credit cards already on file, it could rapidly eclipse all competitors.

http://www.theverge.com/2014/5/9/5698158/what-apple-is-really-buying-with-beats

 

[NLxAROSA]

I think you guys are spot on, it's not about the audio products. 👍 Which leaves the question: what are they going to do with the product line(s)? Just finish them off or upgrade the quality?

 

[Leicht]

I think you guys are spot on, it's not about the audio products. 👍 Which leaves the question: what are they going to do with the product line(s)? Just finish them off or upgrade the quality?

I'm assuming upgrading the quality in general, maybe with aid of the new Retail and online store senior Vice President, Angela Ahrendts?

Since Angela Ahrendts took over at Burberry in 2006, the fashion label has consistently outperformed the FTSE 100, and she has become the highest-paid FTSE 100 CEO. She is also one of only three female CEOs in its ranks.

Her achievements in revamping the luxury goods company during a global economic crisis and increasing its value from £2bn to £7bn are well documented.

In 2011, Burberry was named the fourth fastest-growing brand in the world by Interbrand (behind Apple, Google, and Amazon). Much of its success has been digitally-driven. Under Ahrendts, Burberry transformed its online presence to showcase every facet of the brand, and the web became pivotal to marketing and sales.

 

[boiltheocean]

Yeah 200k subscribers is not a reason to spend $3.2 billon dollars. If Apple wanted a subscription service why didn't they buy Spotify, valued at $4 billion or Deezer with it's large number of telecoms ties.

 

[Leicht]

Yeah 200k subscribers is not a reason to spend $3.2 billon dollars. If Apple wanted a subscription service why didn't they buy Spotify, valued at $4 billion or Deezer with it's large number of telecoms ties.

Again, we don't know until few months after the acquisition.

On the article about spotify:

While Apple has dithered with music services, Spotify has expanded aggressively around the world. The Swedish company, which has raised more than $500 million,expanded from 17 to 32 markets last year. It remains unprofitable, and its long-term prospects remain unclear.

 

[Azuremen]

Yeah 200k subscribers is not a reason to spend $3.2 billon dollars. If Apple wanted a subscription service why didn't they buy Spotify, valued at $4 billion or Deezer with it's large number of telecoms ties.

This, most music people I know aren't even aware of Beats having a subscription model, along with myself.

Again, we don't know until few months after the acquisition.

On the article about spotify:

And Amazon wasn't profitable for years, so this isn't really a huge deal. The fact Spotify is integrated into Facebook and has a huge amount of presence is extremely relevant though, and certainly more so than Beats. Or make a move to acquire a classic name like Napster or a newer name like Rdio that has already pushed itself into numerous markets.

Honestly, seeing how Apple has never been successful without Jobs at the helm, I feel the company will slowly fade from relevance. The past few years has seen them copying other companies and ideas more and more, rather than pushing anything revolutionary out, such as the iPhone or original iPod. Yes, I'm fully aware these two products weren't the first touch screen phone or MP3 player, but they did the job so much better than anything at the time that it was revolutionary.

 

[LMSCorvetteGT2]

So in other words Dr. Dre is swimming in more money and saying take that Jay

 

[Robin]

So let's say the deal is purely for the streaming service, which lets face it, no one heard about till today , it still doesn't make sense.

Firstly why buy a service which is one of the smallest players.... if your looking to spend billions just buy the big fish like Spotify.

Secondly, what buy them at all! As if Apple doesn't have the resources to develop a music streaming service in house. With 3.2 billion they could get a hell of a lot of R&D done for that.

I have to wonder in 10 years will it be written that this move marked the turning point which saw Apple fall back into obscurity like in did the 90's.

So in other words Dr. Dre is swimming in more money and saying take that Jay

I think the deal makes him the worlds first individual billionaire music artist, even the Beatles haven't made a billion each.

 

[Leicht]

As with any acquisition, it will be months before we can begin to assess whether Apple is getting its $3 billion’s worth.

 

[BobK]

Which I had never heard of until today. Anyone else the same?

Yeah, I never heard of Beats either until this acquisition flooded the media.

 

[Crash]

I'm a little puzzled by the acquisition myself, but I'll give this deal the benefit of doubt since it's really not that much money in the grand scheme of things. Supposedly, Beats has a solid revenue stream and is a well established name. This is hardly crazy at all compared to a bunch of other acquisitions in the tech industry.

Also, an interesting article on the acquisition that takes on the perspective that it was a good deal: http://www.forbes.com/sites/markrog...-worst-acquisition-except-for-all-the-others/

Yeah 200k subscribers is not a reason to spend $3.2 billon dollars. If Apple wanted a subscription service why didn't they buy Spotify, valued at $4 billion or Deezer with it's large number of telecoms ties.

Assuming Spotify wanted to sell in the first place, and that it wants to sell specifically to Apple.

Plus would Spotify have as large of a customer base as they do now if they were acquired by Apple?

And Amazon wasn't profitable for years, so this isn't really a huge deal.

Errrrr, Amazon's a special case, and maybe a few other companies have pulled it off, but not being profitable for years and years and years is a really good way to lose investor interest. Spotify may be able to pull themselves to profitability eventually, and it would even arguably be smart for something as big as Apple to take a loss in order to break into that market, but I wouldn't just downplay Spotify unprofitability.

 

[F1GTR]

Beats by Apple = High Price Accessories!!

And Beats weren't expensive before Apple bought them out?

Yeah 200k subscribers is not a reason to spend $3.2 billon dollars. If Apple wanted a subscription service why didn't they buy Spotify, valued at $4 billion or Deezer with it's large number of telecoms ties.

Bigger/better licenses from major labels, Dre's and Iovine's influence within the entertainment industry (which will help with iTunes/iTunes Radio too), and far better brand recognition compared to Spotify/Deezer/Rdio. Doesn't matter if you haven't heard of Beats streaming, you've heard of Beats Audio...

There's also the question of wearables too. Beats managed to make big headphones cool again, perhaps they'll manage to turn geeky smartwatches around too.

 

[Omnis]

Dre is not laughing to the bank, Monster is.

Beats processing sucks. Takes all the dynamic range out of the music. Their earbuds and headphones are truly awful. The bass response is like an elephant queefing into a mud puddle. Sounds like you're listening through a paper bag.

 

[gtone339]

And Beats weren't expensive before Apple bought them out?

Very pricey before Apple bought them.

 

[Korza]

Dre is not laughing to the bank, Monster is.

Beats processing sucks. Takes all the dynamic range out of the music. Their earbuds and headphones are truly awful. The bass response is like an elephant queefing into a mud puddle. Sounds like you're listening through a paper bag.

Monster will be crying to the bank. The deal with Monster ended in 2012 with Monster now making headphones competing with Beats offerings.

Very pricey before Apple bought them.

A lot of it is mark up though. Most Beats gear we sell at work has at least a 20% profit margin.

 

[Omnis]

Now that's funny. Thanks for informing me.

 

[AzNTypeR]

Hmm, if this means that when I buy the new iPhone 6 these Beats will come with it, I'm all for it!

If not, I don't really care.

 

[gtone339]

A lot of it is mark up though. Most Beats gear we sell at work has at least a 20% profit margin.

What retailer store are you working at in Nelson?

 

[Robin]

Monster will be crying to the bank. The deal with Monster ended in 2012 with Monster now making headphones competing with Beats offerings.

Yeah Monster are the biggest loosers here, they were pretty much unknown by the general pop until they tied up with Beats and people will now forget about them all over again.

A lot of it is mark up though. Most Beats gear we sell at work has at least a 20% profit margin.

More like 400%!

Google Glass for example was found to have a whopping 1800% markup.... so easy to rob hipsters.

 

[Korza]

Yeah Monster are the biggest loosers here, they were pretty much unknown by the general pop until they tied up with Beats and people will now forget about them all over again.

Which is a shame cause they make some nice stuff. They use JBL hardware so they sound quite good.

More like 400%!

Google Glass for example was found to have a whopping 1800% markup.... so easy to rob hipsters.

Yeah, there's no denying they're severely overpriced.

What retailer store are you working at in Nelson?

I'm at Harvey Norman.

 

[G.T.Ace]

As mentioned, Beats headphones are crappy, overpriced and the mainstream eats them up because design.
Just like most Apple products, so this fits perfectly fine.

 

[Luminis]

Hm. It's not like I really care about Beats or Apple's business strategy. But Beats and Apple fits so ridiculously well, doesn't it?

I can't even imagine how many people I know form work would pay some serious cash for this:

Either way, I'd assume that Apple could sell some mediocre headphones at ludicious prices with or without Beats. Apple doesn't need to buy a popular brand to sell stuff with a huge premium, they've been doing that for years. And I can't imagine that the streaming service and the corresponding infrastructure is worth the price.

As @Azuremen said, there seems to be nothing special about Beats that couldn't have been had for far less cash from another company.

Oh well, one can at least crack jokes about it, right?