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Apple in Talks to Acquire Beats Electronics for $3.2 Billion [Updated]

Please let this deal implode. Beats quality is just awful. Apple, please, if you need quality sound hardware, buy out Sennheiser, Grado, Denon, even Audio Technica. All of them destroy Beats "quality."
 
I can't see why Apple would want Beats hardware. They must want Beats Music if there is any truth to this rumor.

Then again it would be kind of odd for Apple to spend 3.2b just to obtain the subscription service when they could create their own service. I mean Beats was able to do it.
 
Velin said:
Please let this deal implode. Beats quality is just awful. Apple, please, if you need quality sound hardware, buy out Sennheiser, Grado, Denon, even Audio Technica. All of them destroy Beats "quality."
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Do any of these companies have a successful streaming business? Any of them?
 
this to me sounds completely crazy, and way to overpriced. Either Beats have something we haven´t seen yet which will revolutionise music, or I´m baffled by this. Their streaming service haven´t in set any footprint in that business and their headsets are nothing apple easily makes better themselves.

So, guess they have a hidden secret? Beats CEO kinda resemble T.Cook, maybe its a distant cousin, secret lover, or something?!?
.....
 
Michael Goff said:
They're expected to start selling the Level series this month. >_>
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Haha, didn't know that. Interested to see how that goes. I was just on the site and tried to find the headphone section, but they just have in-ears posted.

edit: just looked them up. Look great albeit very reminiscent of the B&O headphones in design. I guess Samsung recognised sooner than Apple that people are buying on-ear and over-ear headsets nowadays.

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iMcLovin said:
So, guess they have a hidden secret? Beats CEO kinda resemble T.Cook, maybe its a distant cousin, secret lover, or something?!?
.....
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Beats has a large chunk of the over and on-ear headphones market. A market that Apple isn't active in.
 
BayouTiger said:
Only one of so many asinine comments in this thread. Daimler did nothing with Chrysler but suck them dry and dumping them to Cerberus. The only good thing was giving them some tech for the LX cars.

I would never own a pair of Beats, but I am absolutely certain that there are more Beats cans plugged into iDevices than all other premium phones put together. Add the Music service which brings the former MOG into play.

Just because the product is not your cup of tea, does not make it bad.

Asa stockholder, I am stoked, but I'll keep my Ety's.
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I'm probably quite a bit older than you so I've seen this thing repeated over and over again. Once great companies crap out all the time. Where are Hudson, Studebaker, Triumph, Sunbeam, AMC? Where is the entire British Automotive Industry, once greatest on earth? Where are Cray, Vax, Univac, DEC? If you had said 40 years ago that all of those companies would be not even memories any more for most people everyone then would have said you were nuts. Apple is at a huge turning point now and they are obviously floundering the way us old farts watched so many companies flounder before they crashed.

Mercedes lost LITERALLY TONS of money on the Chrysler beast and was lucky to be able to dump it at a horrible loss before their MB brand was tarnished beyond saving - in fact I remember they had to PAY almost a billion dollars to get rid of it. Mercedes was very lucky they didn't go under with Chrysler.

If/When Apple goes under, for a while we'll look back and say "gee, why didn't the board dump that idiot CEO," and then a few years later the young folks will be like "Apple, you mean the fruit?" How many people under the age of 30 today know what a Commodore 64 was? It was once the greatest selling computer of all time. Motorola invented the cell phone and now they're just a brand owned by some Chinese company poised to stick the name on plastic junk. If the Apple brand name is sold off to some third world company in less than a decade it would not be surprising to me at all.
 
peterdevries said:
Haha, didn't know that. Interested to see how that goes. I was just on the site and tried to find the headphone section, but they just have in-ears posted.
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I'm wondering how well it can go, too.

I'll get you a couple articles about it.

http://www.businessinsider.com/samsung-level-headphones-2014-4
http://androidandme.com/2014/04/news/samsung-level-headphones-and-speakers-officially-announced/
http://www.cnet.com/news/samsung-level-up-with-new-headphones-and-speakers/
 
peterdevries said:
That's only part of the story I think.

There is a strong shift happening in the headphones market. The in-ear headphones of iPhones and other devices are left in their packages and on-ear or over-ear headphones are now bought by kids and young adults.

I live close to a media college and the majority of the kids wear Beats headphones.

Apple does not produce any on-ear headphones, so part of the story might be that they feel that they need to get into that market.
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I don't think it would be that difficult for Apple to create stylish bass boosted headphones made from plastic. They already have a well established brand and a design team that could trump Beats. Their brand is already tied to audio and it would be a branching out from iPods, iTunes, and their ear buds.
 
peterdevries said:
That's only part of the story I think.



Apple does not produce any on-ear headphones, so part of the story might be that they feel that they need to get into that market.
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They could also hire like 5 great engineers and pay them $190k/year to make some. Just a bit cheaper than $$$billions$$$

It's not like headphone tech isn't >100years old. 😎
 
If Apple bought them out I can only hope that Beasts will then get a giant overhaul and that's a good thing. Beats sound terrible. Not saying that apple should do this but it does seem a bit odd. On a side note what will happen to Dr. Dre will they kick him out or keep him?

And it's a bit ironic the ad at the bottom of my page here is an ad for Skullcandy lol.
 
3N16MA said:
I don't think it would be that difficult for Apple to create stylish bass boosted headphones made from plastic. They already have a well established brand and a design team that could trump Beats. Their brand is already tied to audio and it would be a branching out from iPods, iTunes, and their ear buds.
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iolinux333 said:
They could also hire like 5 great engineers and pay them $190k/year to make some. Just a bit cheaper than $$$billions$$$

It's not like headphone tech isn't >100years old. 😎
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I agree that Apple could easily whip up the tech, but they would have to invest quite an amount of money to become a true competitor to Beats in terms of market share. It is simply cheaper to acquire the tech and the market that goes along with it.
 
kaielement said:
If Apple bought them out I can only hope that Beasts will then get a giant overhaul and that's a good thing. Beats sound terrible.
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I wouldn't be surprised if Cook was like "Oooo 'Dr. Dre!' That sounds like youth stuff we need more youth stuff at Apple!" I feel like I'm watching a real life Dilbert cartoon, pointy haired boss and all.
 
some companies have CEO buying start-ups like WAZE to improve their geolocation applications for 1.5 billions, a major field in the competition, other companies have T. Cook ready to waste 3.2 billions by buying BEATS Audio. 😀🙄
 
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peterdevries said:
I agree, but Apple would have to invest quite an amount of money to become a true competitor to Beats in terms of market share. It is simply cheaper to acquire the tech and the market that goes along with it.
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No it's not. Apple already IS a true competitor in the Audio market in EVERYONE's mind. Dear Lord they changed the entire industry and drove the record companies into the dirt with iPod/iTunes. EVERYONE associates Apple with music.

Apple needs to put a graphic EQ in iOS 7. It is insane that they won't do this. They are no longer making any sense at all. Their decision making process is completely losing touch with what people want and need. If they made truly great headphones, which is a very easy thing to do as there were great headphones even in the mid 1960s, and stuck an Apple name on them, everyone in the music industry would give them a try and they would be successful or unsuccessful on their own merits/quality. There are literally thousands of engineers right who know exactly how to make excellent headphones if they are allowed to use good materials. To spend $2billion for a brand name that most audioheads hate defies all reason.

You are arguing for triumph of marketing over quality. Is Apple trying to be the next Samsung? I'll pass on that.
 
FrozenDarkness said:
comments like this proves that tim cook has lost it
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from what i've seen he never had it to begin with. Apple is really a Fashion company that had a boss that thought that great fashion should involve excellent hardware running excellent software. That made it fashionable to have great software and hardware. Tim Cook is about as fashionable as Bill Gates in high school.
 
Has tim cook gone insane, someone please ask him to read some of the reviews on amazon about beats.

There is no innovation in the hardware, just commodity in a very crowded market, and on top of that - expensive but low quality.

Their streaming service is also nothing unique nor innovative.

3.2 billion for this??? what is apple thinking, Jesus Christ.
 
Beats was the brand that ruined HTC One for me. Such a fine design, but branded by this teen low quality brand. Even at Beats price tag, I just see them as poorly designed, cheap and ugly.

3.2 billion? I would not even touch a free pair of beats or their service...
 
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iolinux333 said:
No it's not. Apple already IS a true competitor in the Audio market in EVERYONE's mind. Dear Lord they changed the entire industry and drove the record companies into the dirt with iPod/iTunes. EVERYONE associates Apple with music.

You are arguing for triumph of marketing over quality. Is Apple trying to be the next Samsung? I'll pass on that.
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Sorry, but you seem to be missing the point. I'm not arguing marketing over quality at all. Where did I say that? I know that it is fashionable to think marketing is bad and product quality is most important, but people that think that are grossly misunderstanding how a business like Apple (or any other for that matter) works.

Sure Apple could very well design their own headset and do it quickly. But Beats is currently the headphone brand that matters and Apple does not have brand credibility in that market. That means that it will take time before Apple would grow in that market to become a viable competitor and it will cost them hundreds of millions in marketing to achieve that.

An understanding of market dynamics is important to see why acquisition is better than self-production in this case. The headphone market is maturing or already mature. It is still growing, but most innovations are incremental (connectivity through NFC / BT, Noise cancelling).

A lot of players produce headphones but fail to establish large market shares. Look at Sennheiser which has products in all categories and price classes, but fails to make a dent into Bose and Beat's market shares. The excellent B&O headphones are not much more expensive than the top of the line Beats and yet they fail to become truly relevant in the market. What this all means is that even with good products and marketing it is difficult to establish a market presence that will add significant revenue to the bottom line (talking from a business point of view here, not what the customer wants).
So businesses of the magnitude of Apple will engage in strategic acquisitions to grow in mature markets. It is the only way to become relevant quickly and to earn large amounts of money. I just learned that Samsung will introduce a new headset. We can talk again in 3 years and discuss how well they have done. Their headset (never mind how good it is) is confined to the fringes of the market.

I'm sure you will come back with "what about the iPad and iPhone etc". These were also mature markets where Apple entered with a disruptive innovation. Totally different situation where a completely new product can very quickly take over the market. Unless Apple thinks of something really different in terms of headphones, this will not happen when they make their headphones themselves.

Overall this looks to be a good acquisition:
-A well performing music streaming business with the possibility of taking some new contracts and technology with it.
-The best performing headphone business in the market. A complementary product line to Apple's current product line.
 
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