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Old May 12, 2014, 09:34 AM   #1
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Apple Impressed by Beats' Ability to Attract Paid Subscribers, Likely to Keep Brand Separate




Music industry veteran Jimmy Iovine is believed to be the primary target in Apple's rumored acquisition of Beats Electronics, but the company also is eyeing Beats' streaming music service and the Beats branded headphone business, reports Bloomberg. Apple likely will assume leadership of the company, but keep the Beats brand independent.

Beats co-founder Iovine previously pitched the idea of a streaming music service to both Steve Jobs and Tim Cook, but neither party showed interest until the streaming music service launched earlier this year.
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Apple became interested in doing a deal with Beats after executives were impressed by Beats Music, an online music streaming service unveiled earlier this year, which was rapidly converting users into paying subscribers, said a person with knowledge of the talks, who asked not to be identified because the discussions are private.
Beats Music could fill a gap in Apple's music portfolio, which now offers digital downloads via iTunes and iTunes Radio, a channel-based music streaming service akin to Pandora. Though still a leader in the music download arena, iTunes is losing ground to full-library streaming music services like Spotify, which is poised to overtake iTunes as Europe's largest online digital music service.

Besides the music service, Apple also will obtain a high-margin headphone business co-founded by rap musician Dr. Dre, Iovine, and early partner Monster cable. As part of the acquisition, Beats will likely remain an independent brand with Apple providing design improvements for future Beats products.

Both Iovine and Dre may take on senior roles at Apple following Apple's acquisition, remaining at Beats' Los Angeles headquarters and traveling to Cupertino when necessary. Iovine is expected to leave his role as chairman of Interscope Geffen A&M records and use his music industry experience to help Apple secure future deals with music labels.

Article Link: Apple Impressed by Beats' Ability to Attract Paid Subscribers, Likely to Keep Brand Separate
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Old May 12, 2014, 09:36 AM   #2
LorenzMeir
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Originally Posted by MacRumors View Post
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Music industry veteran Jimmy Iovine is believed to be the primary target in Apple's rumored acquisition of Beats Electronics, but the company also is eyeing Beats' streaming music service and the Beats branded headphone business, reports Bloomberg. Apple likely will assume leadership of the company, but keep the Beats brand independent.

Beats co-founder Iovine previously pitched the idea of a streaming music service to both Steve Jobs and Tim Cook, but neither party showed interest until the streaming music service launched earlier this year. Beats Music could fill a gap in Apple's iTunes music service, which now offers digital downloads and iTunes Radio, a channel-based music streaming service akin to Pandora. Though still a leader in the music download arena, iTunes is losing ground to full-library streaming music services like Spotify, which is poised to overtake iTunes as Europe's largest online digital music service.

Besides the music service, Apple also will obtain a high-margin headphone business co-founded by rap musician Dr. Dre, Iovine, and early partner Monster cable. As part of the acquisition, Beats will likely remain an independent brand with Apple providing design improvements for future Beats products.

Both Iovine and Dre may take on senior roles at Apple following Apple's acquisition, remaining at Beats' Los Angeles headquarters and traveling to Cupertino when necessary. Iovine is expected to leave his role as chairman of Interscope Geffen A&M records and use his music industry experience to help Apple secure future deals with music labels.

Article Link: Apple Impressed by Beats' Ability to Attract Paid Subscribers, Likely to Keep Brand Separate
Sounds good to me
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Old May 12, 2014, 09:36 AM   #3
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So, my post on the matter could very well be right
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Old May 12, 2014, 09:37 AM   #4
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Old May 12, 2014, 09:37 AM   #5
spyguy10709
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It wouldn't make sense for Apple to buy a brand for 3+ BILLION dollars, then get rid of the brand. Lets be honest, Apple's buying Beats for the name, not the tech or anything like that... So getting rid of the brand would be HIGHLY illogical. Would be cool to see Beats EarPods, though. I think with Apple's involvement, they could release a comfortable, balanced sounding set of headphones that look really good!
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Old May 12, 2014, 09:38 AM   #6
Razeus
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The Beats brand name is too strong to get rid of it.
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Old May 12, 2014, 09:40 AM   #7
lolkthxbai
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Originally Posted by LorenzMeir View Post
Sounds good to me
That quote was unnecessary...
-----

If this is true, then maybe the deal was not as mysterious as people thought.
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Old May 12, 2014, 09:40 AM   #8
chriscrk
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If people think this acquisition is stupid just because they don't like the headphone quality, they fail to realise the bigger picture, and they are real bozos.
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Old May 12, 2014, 09:41 AM   #9
cmChimera
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Originally Posted by losthorse View Post
"We can't innovate anymore... let's just buy the first thing that celebrities endorse."

-Tim
You're sooo funny and original.
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Old May 12, 2014, 09:41 AM   #10
Fzang
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Why are we still discussing this as if it's already happened? I know this is MacRumors but at least we can discuss iPhone 6 rumors without saying "Yup, this is exactly how it's going to look like 4 months time. No doubt about it".
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Old May 12, 2014, 09:42 AM   #11
Jack Delgado
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What kind of crappy variant of the logo is that?

Edit: Apologies... that's apparently the official Beats Music logo. Err... not a fan I spose.
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Old May 12, 2014, 09:43 AM   #12
anradu
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Spotify

Someone please answer me this..
Spotify's Market Cap is around the 4.5$ billion mark

Apple are buying beats for 3.2$b

Why exactly are they pursuing Beats Music - if Spotify has already established itself?

Just for the hardware?! I understand Irvine and Dre are two they are keen to add onto the board. Otherwise it appears as they are just willing to gobble down the headphone section into their product line..?
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Old May 12, 2014, 09:43 AM   #13
yinz
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The idea of Beats helping the wearable tech from Apple sounds interesting.
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Old May 12, 2014, 09:45 AM   #14
trife
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I'm happy for all you Apple doomsday prophets--you can relax now.

All you undercover (and also overt) bigots can still kick rocks though.

And to all the aforementioned groups, see you at the iPhone 6 launch.
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Old May 12, 2014, 09:45 AM   #15
VulchR
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This still seems a little weird to me. I cannot imagine how anybody could think that Apple s going to get a good ROI on this, but no doubt Apple has information that I do not. Still I would have thought Lytros would have been a better acquisition - they're doing something different that is not so easy to copy. The worst thing about Apple's Beats acquisition is that Samsung and Microsoft will now acquire competing subscription services, ever expanding the range of mediocrity.
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Old May 12, 2014, 09:47 AM   #16
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Originally Posted by losthorse View Post
"We can't innovate anymore... let's just buy the first thing that celebrities endorse."

-Tim
Don't pretend SJ never bought his "innovation". :|
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Old May 12, 2014, 09:51 AM   #17
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My guess is "Beats by Apple" will be the branding.
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Old May 12, 2014, 09:51 AM   #18
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All I consider is the Dr. Dre headphone are headphones with a equalizer built in the increase base and take out midrange. The only thing the Beats Headphones are good for is base heavy rap music. Something like Ska or string instrumentss music and it sounds terrible.

I have to think Apple is really after the rap music crowd and the record labels Dre has has ties with to capture rap music lovers, along with some streaming tech and streaming patents.
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Old May 12, 2014, 09:52 AM   #19
WinstonRumfoord
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So...

Firefox/John Q Public effectively ousted it's CEO for donating $500 to a cause against gay marriage.

I wonder what Apple, a historically progressive company will do about Dr. Dre making millions glorifying homophobia and misogyny?

"Long as my mother****ing pockets was fat
I didn't give a **** where the bitch was at
But she was hangin' with a white bitch doin' the **** she do
Suckin' on his dick just to get a buck or two"

Just food for thought...
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Old May 12, 2014, 09:53 AM   #20
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Quote:
Originally Posted by anradu View Post
Someone please answer me this..
Spotify's Market Cap is around the 4.5$ billion mark

Apple are buying beats for 3.2$b

Why exactly are they pursuing Beats Music - if Spotify has already established itself?
Two things are likely, I think: Spotify wouldn't even talk to Apple or Spotify wanted more money than Apple was willing to pay them.
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Old May 12, 2014, 09:53 AM   #21
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Wireless Streaming Headphones

We don't know of any new products that Beats has coming down the pipe line. Maybe Apple has this info among other info to make this purchase of Beats.
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Old May 12, 2014, 09:54 AM   #22
Jambalaya
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Apple have been "sufficiently impressed" by Beats streaming service launched only a few months ago to pay $3bn for the company - really ? Well the stock market doesn't know what to make of the acquisition, the share are unmoved.
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Old May 12, 2014, 09:57 AM   #23
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converting users into paid? Beats doesn't have an ad-supported conversion funnel. Spotify, Deezer, Bloom do. Beats, Rdio, Napster don't. Beats has not proven that it can convert any users to their paid tier... For the moment, the vast majority of their users are AT&T bundled customers, not standalone paid subscribers.
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Old May 12, 2014, 09:58 AM   #24
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It's going to be so hilarious if this whole rumor turns out to be just a rumor and Apple doesn't even buy Beats.
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Old May 12, 2014, 09:58 AM   #25
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Quote:
Originally Posted by anradu View Post
Someone please answer me this..
Spotify's Market Cap is around the 4.5$ billion mark

Apple are buying beats for 3.2$b

Why exactly are they pursuing Beats Music - if Spotify has already established itself?

Just for the hardware?! I understand Irvine and Dre are two they are keen to add onto the board. Otherwise it appears as they are just willing to gobble down the headphone section into their product line..?
Valuation does not equal sales price. Whatsapp was valued at 1.5 billion and was purchased for 19 billion.
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