Apple Said to Be in Talks to Buy Beats for $3.2 Billion
mobile.nytimes.com
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1. Apple has the tech and library to do their own subscription service if they want to. You think they can't do their own licensing deal? They surely don't need to pay $3B to acquire someone else's.
2. Apple wouldn't want to operate a cross-platform service. They'd pay a huge premium to acquire a bunch of Android customers than they'd promptly purge. Plus, it'd probably invite anti-trust scrutiny.
3. The argument about Beats headphone quality is moot. Even if it's more than just marketing / bass-heavy EQ, Apple would not pay $3B to acquire headphone technology.
None of that makes any sense at all. I have to believe someone thinks Beats and Square are interesting to Apple because their products have a certain superficial Apple design aesthetic. But it makes no sense from a business model standpoint.
Or maybe Apple's doing some kind of next-level mole hunt here to level-up on secrecy.
When you are the richest guy in town it is hard to negotiate a good deal. It is probably much smarter to just buy Beats. If they bought Spotify, they would be stuck supporting Android and Windows customers.
The $3B price probably reflects the current profitability of the headphone line. For what it is worth, audio brands seem to have staying power. I am not sure if the quality criticisms are a positive or negative value signal personally.
That means that it doesn't matter if Apple (or anyone else) buys someone who already has a deal - the previous terms go away and the record companies get to start the negotiations all over again.
Do you mean that the negotiation will go something like "come on, we know you can afford more!"? Granted, I haven't ever participated in negotiations at this level but I really doubt that being rich is a disadvantage.
When you control distribution and can offer larger revenue streams, you have a lot of negotiating power. See: Walmart.
It simultaneously gets rid of people that leak to the press as well as anyone working for the company that hears something like that and not only believes it, but doesn't speak out against it.
My grandmother does not have Beats.
No amount of licensing, etc. is going to get Apple the branding that Beats have right now in the music hardware space.
1. Apple might actually need to acquire a team to do better licensing deals with the music (and TV/movie?) industry. Beats, I didn't realize, has some incredible people involved and has a lot of industry buy-in. That sets it apart from Spotify, etc. even though it has no subscribers.
2. Maybe Apple does want to buy a brand. The Beats brand has a lot of pull with communities where Apple doesn't, especially African-Americans. They may see it as an opportunity to upsell them from Android to Apple products.
3. Maybe Apple does need a cross-platform service to do the deals it needs. Like they did with iTunes on Windows back in the day. They get that, without any awkward "iTunes for Android"
4. Beats' headphones business is totally not Apple's approach.. yet? Right now it's more like Monster Cable, commodity product dressed up with sales & marketing & cachet. But what's to stop Apple from improving the quality of the brand? Apple-designed Beats headphones could be something very special. (But that is the weirdest part of this.. Monster is the antithesis of Apple and Apple's never done sub-brands. Maybe they literally bought them just for the preceding reasons.)
[1] http://www.dailydot.com/technology/apple-beats-jimmy-iovine-...
They're overpriced, certainly. But poor quality is not fair. They've got good sound, heavy bass, and the build feels solid.
EDIT: I don't actually own beats, I prefer my Sennheiser's. But my brother got a pair of Beats as a gift and I've used them.
† The Momentum over ear have a totally different, much more balanced sound. Almost a monitor headset, except with detail being just right so that they don't give too much fatigue.
How do they objectively have "incredibly poor quality"? Do you have a link that support they have really poor sound quality or bad build quality or horrible customer satisfaction rate?
http://www.nytimes.com/2011/11/20/business/beats-headphones-...
I don't wear them, but I don't hate the people who do (though I'm not huge on Beats' "the way it was meant to sound/the way the musician intended" branding)
[1] http://www.innerfidelity.com/content/monster-beats-dr-dre-so...
ding that's the crux of it. people want something that makes them feel good, which often isn't something you can quantify in a lab. so rather than trying to build a better headphone, beats built the equivalent of a booming car stereo strapped to your head, and that evokes a very specific emotional response for most of their customers.
fwiw: i have a pair of Bose QC15 cans that i got as a gift from work. i think they're crap for reproduction purposes, but the experience they're designing for is noise cancellation.
I tested them out. It was horrible, it sounded almost like what it sounds like when a stereo headphone jack is only partially inserted -- on three different devices and two different pairs of headphones.
They suck and are a major ripoff.
Whenever something advertises beats audio, I know that it's not a product for me.
But - from an Apple perspective, they're not buying just the headphones tech, but the manufacturing capacity as well, I'd assume.
I had a few very sophisticated sets of expensive headphones (plus a headphone amplifier) and I just don't use them any more. When I don't need to wear headphones, I'll sit down in my theatre room. When I need to wear headphones, it's because I'm in an environment with other noises (office, travel, etc) and the noise cancellation trumps any other cans' refinement.
In a noisy environment though, they just can't compete. Yes, the 770 Pro have excellent passive isolation characteristics, but they do absolutely nothing for low frequencies [0] whereas the QC15 achieves 20db [1]. This makes all the difference in the world when you're trying to escape into music while flying.
I know what you mean about active noise cancelling being fatiguing. I've been lured into noise cancellation before, only to be repelled by the strange feeling of pressure within the ear. I wouldn't have given a moment's consideration to the QC15 had I not been loaned a pair by a friend. I'm not going to say the QC15 are perfect for everyone, but to my ears the pressure phenomenon is pretty much nonexistent. I've worn them for an entire 13 hour flight without a moment's discomfort.
[0] http://www.innerfidelity.com/images/BeyerdynamicDT770.pdf
[1] http://www.innerfidelity.com/images/BoseQuietComfort15.pdf
I've done AB comparisons with friends who've bought Beats, Sony, Skull Candy etc. and they're always blown away by the difference between the product they bought, and my AKGs, A-Ts or Sennheisers. I recently tested some Beyerdynamics and would highly recommend them, although I still think A-Ts are the best bang for buck around.
A flat response is always desirable to the listener (whether they know it, or not). If the listener desires EQ (for a bass-heavy and bright experience), they can apply it before it goes out to the transducer. Old stereos used to have a "loudness" button to slap this kind of curve onto the audio, but all modern playback devices have EQ and such available. But, I'd recommend using good quality headphones and listening as the engineer and artist intended.
Not to say that Beats are great or anything, but applying a bass boost to something with a flat response is not going to produce better bass than housing, speaker, etc that all resonate together at the right frequency.
Another thing to keep in mind is that most people will be using these in noisy environments.
I think that if people want a strong bass, they should listen to music that has strong bass and use headphones that will accurately reproduce it.
If they want music that doesn't have strong bass to sound like it does, well that's the role of the equalizer, not the headphones. The role of the headphones is to take whatever signal they're given and accurately reproduce it.
That's what the comment you're replying to is saying.
I think they sound horrendous (I'm an audio engineer) but I have a 9 year old friend who is obsessed with getting the $300 version and can't be persuaded that this is waste. So I would say Beats has a powerful brand. The margin on the headphones has to be unprecedented...
Not true. Engineers working in pop and hip hop mix primarily with the understanding that the first listen by a consumer will be on the radio in their car. This has several built-in assumptions, and the expectation of lots of sub bass being reproduce-able is not among them. Sales of records are heavily affected by how good the song sounds on the radio, and most people have the audio equipment that came with their car.
Not only that, the next stage of music marketing evolution is earbuds. So, if one were to mix for the next most popular method of getting your music into the ears of consumers, you'd mix with the expectation of being heard first through cheap earbuds.
Engineers mix knowing that their tracks will be played on a wide variety of equipment, from very bad to very good. The more accurate their equipment is, the better they'll be able to serve all of those listeners. But, the best results will always come from having accurate equipment for playing it back.
I'm also an audio engineer, and I, too, find the $300 beats headphones to be an abomination to both good sense and good taste. But, I disagree with your suggestion that engineers are mixing with less bass because subwoofers exist.
The bottom line is that virtually all playback systems that exist in the real world are nothing remotely like an accurate studio monitor. The engineer is always concerned with how the mix translates to different systems. In this process accurate monitoring is profoundly helpful, but that doesn't mean the engineer expects any listeners to have such a system.
Bass enhanced headphones like Beats have become yet another listening environment to be considered.
People who want really strong bass will buy headphones that have strong bass --- and then turn the bass up on the EQ too. :)
See this sound on sound article for more (and why you might want a mixing desk)
http://www.soundonsound.com/sos/sep08/articles/yamahans10.ht...
They are not great speakers but they are probably the target of most pop / rock music in the studio.
I've heard producers and studio engineers say that if something sounds good on NS10s, it'll sound good on anything.
This is the same reason professional mastering engineers will sometimes insist on listening to mixes on average car stereos, ipod headphones, and cheap consumer audio systems. It doesn't matter how good it sounds on your $100,000 studio system if it sounds terrible to 99% of the population.
It is true that for a decade or two, the NS10 was the monitor on which more records were produced than any other. And, they are reasonably accurate. There are more accurate speakers than the NS10, even at similar prices, but part of the value of the NS10 was that you'd have them wherever you were working. The mastering engineer would have a pair of them, too, so you'd know everybody in the path from tracking to cutting the master would be hearing roughly the same thing. But, it's worth mentioning that I've never been in a professional studio that only had a pair of NS10s. They were considered the sanity check speakers...not the speakers used for all of your mixing and such.
Anyway, the newer models (HS series or MSP series) from Yamaha might be a good choice, if you want good reference monitors.
But, a reasonable level accuracy should be the goal of every transducer. Just because consumers make often make poorly informed decisions based on marketing and tricks played on the ear (because a "hyped" sound, like the Beats headphones and devices, will sound louder and thus "better"...but will also be more fatiguing and will have other negative effects on your listening experience) doesn't mean people who know better should just shut up and let manufacturers do so without criticism.
Have you seen the actual frequency response curves of headphones? They are by no means flat! They can approach flat from 20-20k, but there are always trade offs, at least until you get to certain price points.
What is good or bad sound is largely subjective and socially conditioned. The expectations around binaural recordings of natural sound are very different from highly produced studio production. What is bad in one context is good in another and vice versa. And while I'd go for headphones with better frequency response, it's not the be-all end all measurement either.
Then again, maybe Beats are a tragedy, since we are getting to a point technologically where every headphone could have reference class performance, if that is what the market wanted. That's not what the market wants. Maybe that's the real tragedy.
Yes. And, as I said: Most cheap products accidentally fail at this goal.
It costs a bit of money to produce a quality transducer that is stable, reliably mass-produced, and lasts a long time. Not as much for headphones as for larger transducers, however. For $100 you can buy any of several models that are extremely accurate (compared to what $100 would buy you in speakers). Sennheiser, Shure, AKG, and Audio Technica all offer several models in the $50-$100 range that will destroy Beats offerings at even much higher price points.
Nonetheless, just because most people's cheap headphones suck doesn't mean that a company producing expensive headphones that suck should be given a pass. In a world with good products in a field I care about, why wouldn't I encourage people to choose them over a clearly inferior product? Beats is a demonstrably inferior product with good marketing.
I'm not saying a $25 pair of headphones is particularly good, but it gets past the "obviously bad" test that Beats headphones fail and allows me to leave them at work without worrying about losing or breaking them.
Me, I'm a Skippy Natural guy, but I see a place on the shelf for Goober too ;)
I'm sure Beats, Pandora, Spotify, or any other streaming service would have killed to launch with the full support of the iTunes ecosystem.
[1]:http://recode.net/2014/05/08/why-apple-is-betting-big-on-bea...
Modular phones will create opportunities for high quality audio drivers for Android.
Apple products are synonymous with quality audio, and Apple's success is partly attributed to it's investment in music technology.
A brand like Beats which is popular with young audiophiles could potentially transform Android into a recognizable music platform if they provided a Beats audio driver and quality headphones.
This is a risky proposition for Apple as it would drive more of their high-end audience to view Android as a serious audio contender.
Are they?
I like Apple products but the headphones really aren't great, certainly not for what you pay for them (looking at the prices for the headphones alone).
In that sense you might argue there is a certain synergy with Beats...
Currently there are a lot of different headphones that have very similar specs - I suspect that some company is mass producing drivers and other companies are iust putting these into fashion shells and selling them at large profit. (WESC is an example of a company that I think is doing this).
In this market - not very good headphones sold with large profits to people who care more about looks than sound quality - Beats headphones is exciting buy.
Don't forget that many people will be listening to poor quality source material - poorly ripped; weird dynamic compression; etc.
Steve would roll in his grave. He had Magnepans.
The quality of the audio electronics in iPhones is quite alright. The iPhone's have measured well and sound quite OK given the limitations on space and power. The standard earbuds provided with them are poor quality though, and as an electronics engineer, audio engineer, and musician I would be quite disappointed if Apple allowed this sound reproduction shortcoming to persist. Monster Turbines like the Copper Pro are substantially better than Beats, so upgrading quality might happen, and what I say will be irrelevant.
I want Apple to continue to strive for excellence in quality, and not to let that focus lapse if concentrating on branding and market share.
The iPod and iPhone earbuds seem to me to be an anomaly. They are one of the few areas where it appeared style trumped substance. I can get similar Chinese knockoffs for about a dollar from different places. The cirrus chips and surrounding electronics in the iPhone, and Wolfson's in some iPods are quite capable musically.
My point is more about the legend of Jobs the perfectionist that I've heard so much about in these and other pages. If he were to turn his attention to the earbuds and headphones then I find it incongruous that he would have let the reputation of mediocrity with the Beats sound rest unopposed.
I myself see this as a slide away from innovation.
Hmm... is there a company out there whose sales disprove this statement?
...
Oh yeah, Apple. Maybe you forgot about them?
It's amazing that HP's series "With Beats Audio" actually cheapens their product.
As for Bose, they probably wouldn't be a bad choice, but they do a lot more than headphones and their market cap is $20B, quite a bit more than the $3B we are being told for Beats.
Also, most people aren't aware that Beats are junk. Many consumers mistake a strong bass for good audio quality (or even more shockingly, they don't care about quality, and bass is _what they want_).
In August 2013, reports surfaced that Beats' founders planned to buy back HTC's remaining minority stake in the company, and pursue a new, unspecified partner for a future investment.[11][12] On September 27, 2013, HTC confirmed its plan to sell its remaining 24.84% stake in Beats back to the company for $265 million, with the deal expected to close by the end of the year. Concurrently, Beats announced that the Carlyle Group would make a minority investment in the company"
Exactly. Heavy bass sounds powerful, psychologically speaking. And personally, although I prefer a flat response, I'd prefer one with more bass over one with more treble. Consumers have basically associated treble-heavy with the "tinny sound" of cheap headphones/earphones - there's a reason why there's no competing equivalent brand to Beats that emphasises treble (I suppose an appropriate name would be "Shrieks"?)
As for Beats, they (or at least their components) are made by the same OEMs in China that make tons of other headphones/headphone components, just sold at a ridiculous markup. You can buy headphones with the exact same bassy sound (and often the same or very similar looks!) from them, and get the same experience at a more appropriate price.
On the other hand, when have Apple been interested in selling anything branded with someone else's name?
Actually, they have one. (iTunes Radio)
Of course, the fact that this has to be pointed out to someone arguing how strong Apple's brand is relative to Beats might illustrate the value they get from buying Beats better than anything else.
iTunes match works off your own personal collection, and Radio is just like Pandora. Neither allows you to look for things you don't own and listen to them.
Could it be about patents? Beats got custody of all the intellectual property when they divorced Monster. https://www.google.com/?tbm=pts&hl=en#aq=f&aqi=&aql=&hl=en&q...
I'm afraid this will end up costing Apple more billions down the road as it creates uncertainty about their growth strategy.
Most people are easily fooled when it comes to audio quality and have no idea what sound they "want", so they have to judge the quality of the product on the basis of marketing/branding and design instead. That's exactly what's happening with Beats.
And it is entirely sustainable because (in the mainstream) headphones are first and foremost a fashion accessory, and neither Beats wearers nor the observers are know a thing about what good audio quality is. As long as they look hip wearing Beats in the eyes of mainstream observers (a phenomenon that doesn't show any signs of abating), it'll continue to fly off the shelves.
As someone else commented above, the job of quality headphones is to reproduce the recorded signal as faithfully as possible - a flat frequency response. If you want enhanced base (for example), that should be done in the software equalizer, before the signal gets fed to the hardware. On an objective level, the audio quality of Beats blows. There's simply no other way to put it. Of course, this is all irrelevant to the unwash^H^H^H^H^H^Huneducated masses.
Currently even as an iTunes Match subscriber, if I hear a song on iTunes radio I still need to go and purchase the song if I like it.
Potentially the deals Beats currently have mean I could just tag that song as one I like, and each time I listen to it some amount of revenue is split between the label and Apple.
Acquiring beats would undoubtedly mean they also acquire their licencing contracts, which seem to have been traditionally difficult for Apple in the past.
"The service uses a personalization system combining recommendations based on listening habits and algorithms with human curation and playlists from music professionals, including other "guest" curators, such as Rolling Stone, Rap Radar, and Pitchfork. Song searches prioritize the original, master recordings of songs over other versions (such as covers). A feature known as "The Sentence" allows users to generate playlists by filling four blanks in a sentence with words describing various activities, moods, and genres."
I guess there is some disagreement about whether or not Beats is "worth" $3.2B. Such stories, on the eve of an acquisition, are always about trying to get the price raised it seems. Would be interesting if Apple walks away from the deal at this point.
So I wouldn't be surprised if the labels are being somewhat difficult to Apple about streaming rights - they'll dominate, and once again the labels lack control.
This deal could get round that somehow?
Add to that that I think the labels have vested interests in Spotify and very favourable deals, (while cautious of the streaming model) and it makes sense to not let another player in just yet, especially one like Apple.
Apples service is one that'll ride roughshod over everything, installed instantly on 100's of millions of devices with an iOS update - Sounds like a good use of their money to get that sooner rather than later.
I haven't used Beats headphones but if their tech could be used to perceivably improve idevice's and laptops built in speaker audio it's a win there too.
I'll believe it when I see it though.
Apple building mood sensing tech for personalized streaming service is a bit creepy. Apple adding mood sensing tech to a huge, young, existing, user base is broadly exciting.
They can put them in with iPhones (adapted to include hands free) but I'm not sure how much that would influence people to buy an iPhone over something else.
Does Apple have an answer to Nest? To Tesla? To Comcast?
I understand Beats is a powerful brand, with a youthful and enthusiastic customer base, and they've entered the streaming space with some panache. Apple already knows how to do music. Is this what they're focusing on? It seems like a distraction and not a terribly advantageous one.
http://lefsetz.com/wordpress/index.php/archives/2014/04/01/a...
HTC bought it for 300 million, they sold it as they had no use. Their in the same market as Apple (and with Sense / HTC, they also could use a music broadcast service).
They sold it. Now Apple wants to buy it at a much higher level... Doesn't make any sense.
That said, I think this is a deception to get Samsung to do something costly and stupid.
Btw, HTC One audio sound quality is emotionally exhilarating. (Tears)
Beats could fit that profile. Just make the colors a bit brighter and the successor to the 5c cheaper.
Or sicking with the beats brand (style over quality): Why not use 4s internals ;)?
- or -
Beats 5c http://i60.tinypic.com/103hnjb.jpg
iPod with Beats Audio
Should make us ponder...
Ctrl-F: user acquisition
Look at the last couple of massive acquisitions e.g. Facebook buying companies that made little revenue which made even less sense. Most of the big ones I can think of were for user acquisition and not product/technology. This seems like the same type of play.
Also, Apple is primarily a hardware + associated services company. They're not interested in getting users that aren't Apple hardware owners.