Why Apple Is Buying Beats
stratechery.com
stratechery.com
Apple and Beats are very similar companies - both sell hardware that is relatively cheap to make[0][1], and sell it at an incredibly high markup. Both companies are able to do this because they've built very recognizable brands.
More importantly, Apple and Beats have very powerful brands in disjoint markets - the Beats brand is the strongest in the exact demographics where the Apple brand is the weakest.
It makes total sense that Apple would want to purchase a high-end brand that allows them to expand into a domestic market in which they haven't yet reached saturation, all without "diluting" their brand.
[0] http://appleinsider.com/articles/12/07/27/apples_iphone_twic...
[1] http://teksocial.com/socialblog/2012/5/13/exploiting-the-con...
Lastly, Apple doesn't have a history of buying "cool" because it makes it. Buying cool is what dinosaurs like MS, HP and Dell do.
No, they don't. They want to own the pieces of the chain where they can make greater profits than anyone else.
Apple products aren't successful because celebrities wear them. They're successful because they're the best.
Apple doesn't buy other companies for their services or products. It buys technology, which it then uses to build better products and services.
lol. If that were the case, then I don't understand what kind of technology they're gonna benefit from buying Beats. I mean, the internet is full of reviews stating that Beats headphones suck.
http://www.tuaw.com/2013/11/04/apples-advertising-budget-dwa...
I think Apple recently doubling their marketing budget to $1b was taken with great fanfare, but still puts them far behind their competitors.
However, it is an open question whether Apple stores should be counted as marketing or some other kind of expense. It definitely helps promote their products, but the direct channel also helps with profits.
Why should a technology company that's created a excellent product (iPod/iPhone) have to kowtow to a decaying old media industry by buying one of their "insider" executives?
Apple has all but made music an irrelevant industry. Kids today don't identify with music like past generations and Apple's lost its marketing grip if it thinks they do. A teenager feels today about Instagram as yesteryear's baby boomers felt about The Beatles. Only this time it's even more powerful because the kids themselves are the stars.
To me, Google Glass looks a bit weird, possibly creepy. Whereas if someone's wearing Beats with the screen flipped out, I just assume they're watching youtube or surfing reddit or something like that...not that much different, but enough to be non-weird?
IMO you've hit the nail on the head here. Initially it's going to be weird having people with this 'always on' aspect. Think how people feel when having a conversation/meeting with someone who is constantly looking at their smartphone or even wearing sunglasses. An item like a flip down screen will allow people to show they are paying attention and not recording everything, at least while society gets used to this tech.
"Apple Inc. AAPL +1.24% is preparing to bolster its streaming-music business with a proposed $3.2 billion deal to acquire Beats Electronics LLC, the high-end headphone maker that recently launched the Beats Music subscription service, according to people familiar with the matter."
That's unequivocal - and has a specific price tag, $3.2 Billion, and the LLC that is being acquired.
Would love to see this all be a misunderstanding though - I give it low (but not impossible) probability.
A deal is not done until both sides have signed. Prematurely going public has ruined many a deal, and in the Jobs days the other side announcing a deal first would have completely torpedoed anything. Apple has said nothing on this at all, and it's been almost a week.
It seems extremely unlikely that this is real, given the way that it was announced. It just smells completely fishy.
Most likely Beats thought they could get a better price by going public too early, and didn't think that Cook would cancel the deal because of it. That or they're just complete fucking idiots. Don't talk about deals until they're done, unless you know exactly what you're doing, because it's a tight rope to walk.
Edit: Some proof of reputation: http://pastebin.com/raw.php?i=J9u6KyMk
Reply to this post to confirm within 24 hours, assuming Apple does not announce anything officially beforehand. Elsewhere in the thread you state there will be no deal, so I will count deals that result in Apple controlling or owning a significant portion of Beat's business as a win for me. We can figure out the payment later.
I'm betting that a deal is actually going to happen, not that lawyers will move quickly.
I'll bet that an Apple spokesperson or apple.com will confirm the deal before or on June 13, 2014, GMT.
http://en.wikipedia.org/wiki/List_of_mergers_and_acquisition...
There is no tech and the licenses will not be transferable in an acquisition.
Maybe the headphone business holds some value to Apple but Beats Music certainly does not.
You're right though, and it's entirely possible that the rumors and speculation are false as it makes exactly zero sense for Apple to buy Music.