It's hard to see Beats justifying a $3.2bn valuation without a significant part of that being the value of the brand which suggests that's part of what Apple will be interested in. If that is true is there any precedent for Apple making a significant effort to sell non-Apple branded goods?
I've seen this sentiment a few times and find it fascinating. We find it justifiable for Facebook to spend $19bn on a messaging app with very little revenue yet I read Beats will make around $1bn in revenue this year (+ they have huge margins) and $3bn is difficult to justify.
I did read the entire thing. I don't think the brand matters too much, my point was the profit they're making justifies the price regardless of the brand. And my point was address not specifically to the parent but to the point that the valuation can't be justified which I've seen in several places hence my first sentence: "I've seen this sentiment a few times".
Here I think the question is what the value of Beats is to Apple. Last year Apple's revenue was £170bn so I don't think they're looking at Beats to give them an extra 0.5%.
Of course the other side of that is with Apple's cash pile being what it is there is almost no financial risk to the acquisition so how much justification does it need?
I could see it, Beats are a primarily aspirational product (anyone serious about music will tell you (at length)) that Beats are mediocre at best (even excluding the markup).
I could also see a Beats "FitBit style" device working well in partnership with an iPhone.