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

[Bonte]

HTC sold its 50% shares for 250 million, that's a 500 million valuation just a few years back and Beats did nothing special de last 2 years. I call bonkers on this one.

http://gigaom.com/2013/09/27/htc-is-selling-back-its-shares-in-beats-audio-for-265m/

 

[vmachiel]

Yeah I'm not wearing those.

 

[3N16MA]

HTC sold its 50% shares for 250 million, that's a 500 million valuation just a few years back and Beats did nothing special de last 2 years. I call bonkers on this one.

http://gigaom.com/2013/09/27/htc-is-selling-back-its-shares-in-beats-audio-for-265m/

They launched a Spotify competitor.

 

[weckart]

The audiophiles are hilarious. Completely crap all over every mainstream brand that has been pleasing people for years and want you to piece together a bunch of mismatched components from companies you've never heard of. They'd prefer you to be drowning in speaker wire and instruction manuals so you can hear a small guitar chord in the background if you sit there and try really hard to hear it.

The irony of this on an Apple forum. There are mainstream computer brands out there, too.

 

[FelixDerKater]

Not only did they launch a Spotify competitor, they have a music industry exec right at the top to negotiate deals.

 

[iBug2]

To be honest, Apple in theory could actually buy a company like Shure or Westone, which make premium earphones, and then produce the same quality for a much affordable price for everyone. The earphone I currently use costs 1100$, and that's way too high a price. I'm pretty certain with mass production that same quality can be gotten for 100$. So Apple could ship all their phones and music players with premium quality earphones as an option.

 

[Amazing Iceman]

WTF! I can't think of a worse brand to acquire. Their products are tacky-looking and don't sound as good as some of the other manufacturers like JBL, B&O and so on.

What are they thinking? The look of Beats products doesn't fit into Apple's design language at all.

I'm with you, I rather get something else, but believe it or not, there's a lot of people who love these headphones, and apparently they sell very well.

Otherwise, this company wouldn't be worth the price Apple is paying for it.
And as usual, Apple has seen something good in it to get interested in buying it.

 

[Dave245]

Don't understand the hate for Beats. I have had Solo HD's for over three years of every day usage of about 6hrs (yup, I listen to a lot of music/podcasts). Best headphones and investment I've ever made. Plus the streaming service looks real nice - Beats have style as does Apple. Better than buying gray geeky no-name headphone companies and only then turning them into something nice.

Sorry to oppose almost everyone, but I really hope this one goes through.

I have to say i agree with you. I don't know what all the negativity with Beats is all about, i understand the audiophile's chipping in, but what you must understand is that the average consumer is not an audiophile. I was a little cautious about buying Beats headphones a few years back, but i took the plunge and brought some Solo HD's that were on sale here in the UK. I have used them everyday, they have superb sound quality and are very durable, i use them at home, on the bus and out in public. I listen to all kinds of different music, and so far i have not heard a song that has sounded rubbish on them.

Apple buying Beats is probably going to be for the streaming service, i have to admit that i was surprised when i heard about this, but hey it's Apple they have surprised us in the past

 

[roadbloc]

Beats hardware is awful. A complete rip off. A bit like Apple's I guess, but with NOTHING to justify the price.

 

[iolinux333]

<snip>

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.

<snip>

Aren't you just making my point again, to wit, that hundreds of millions is a lot less than $billions$?


I am a great fan of marketing when it's done well; I understand the point and purpose of it, the power of it, and that companies win or lose depending on the quantity and especially the quality of their marketing. It was generally pretty well agreed at the time that the Amiga was by far better than anything else on the market then, but Commodore's astonishing lack of marketing of the machine was ultimately what did it in.

But certainly it would be better for Apple in the long run to put a few hundred million into marketing their own brand of headphones, or whatever product, than to spend so much for a company for which there is so much ill will towards. I don't think anyone has as much ill will towards B&O, or even Bose really, compared to Beats.

 

[k4rrjin]

$3.2 billion dollars???

Can someone please explain to me how this completely ridiculous sum of $3.2 billion dollars came to be? For a pair of over-glorified headphones, really?

Oh and then there is that online music service... "On July 2, 2012, Beats announced it had acquired the online music service MOG, in a purchase reported to have been between $10 million to $16 million."

I have never even heard of MOG before nor of beats having an online music service. And all that somehow magically adds up to over 3bn???

 

[Bonte]

Not only did they launch a Spotify competitor, they have a music industry exec right at the top to negotiate deals.

ok but can Apple buy that exec and the streaming contracts? Normally the contracts can be stopped with a takeover.

I have to say that this looks nice, the problem with streaming is the 1-device limit most services have, 5 accounts or devices is plenty for most households. This alone is worth the billions if Apple can keep the contracts in place.

Its all beginning to make sense.

.

 

[Mike MA]

Both, the headphones and the streaming service don't seem to fit. The headphones due to the audio quality, the streaming service wouldn't really be a big step either regarding the market share.

But then again, they pretty much know what they're doing, right?

 

[Frazzle]

Apple used to have good taste. Has that died too? What a dumb acquisition. Seems like the MBAs have taken over. Sure, money to be made here, but at what price to your reputation?

 

[JobsGang]

Looks like deal is done.

Dre confirmed it on Instagram.

 

[Zxxv]

Its so they can have Apple Beats in headlines.

Apple Beats Samsung
Apple Beats Sony
Apple Beats Spotify
Apple Beats Google
Apple Beats....


all without getting sued.

pple programs the hive mind. Influences consumers subconscious. Destroys the competition. pple

 

[peterdevries]

Aren't you just making my point again, to wit, that hundreds of millions is a lot less than $billions$?

No, it would be measured in investment and loss of sales comparing self production to acquisition. This is called opportunity cost in business terms.

But certainly it would be better for Apple in the long run to put a few hundred million into marketing their own brand of headphones, or whatever product, than to spend so much for a company for which there is so much ill will towards. I don't think anyone has as much ill will towards B&O, or even Bose really, compared to Beats.

Sorry, but that doesn't make sense. If there is so much more ill-will towards Beats compared to B&O and Bose, than why do I see everyone on the street with a Beats product and not a B&O or Bose? Why does Beats have a much larger market share than the others?

 

[kaldezar]

Why? Beats is terrible at audio. If it was Bose/Bowers & Wilkins then I wouldn't be so surprised.

I wouldn't really equate BOSE with B&W the only real audiophile company here, Bose are merely another company like Beats that markets mediocre products to gullible marks.

 

[6836838]

NO!!!! Please no. Beats headphones are awful! Cheap, plastic things produced by a cable company. I really hope Apple don't go though with this.

 

[NoneOfYourB]

It's all about the streaming, stupid.
Smart move - makes Apple a strong player in music streaming.

 

[kaldezar]

You know, I was expecting more than one headphones designed Apple.

"Ive" been waiting for a larger selection of Apple designed headphones for quite some time.

I would be impressed if Apple bought say Shure a company with a peerless history of audio experience rather than a worthless marketer of fashion devices aimed at tone deaf fashionistas like Beats!

 

[peterdevries]

I wouldn't really equate BOSE with B&W the only real audiophile company here, Bose are merely another company like Beats that markets mediocre products to gullible marks.

For one Apple is not in the audiophile market. Beats may make mediocre products according to many here, but to the rest of the market out there they make a desirable product. And for all we know Apple might take the technology and improve on it. It will not be the first time they have done that (mainly in the software space though).

In addition in terms of business it makes more sense, because Bose, B&W etc have other product lines (speakers), which would be less complementary to Apple's business. Beats is only headphones and some connected portable speakers. It would fit nicely to the rest of Apples product portfolio.

 

[Jambalaya]

Another voice here that cannot understand this. Base heavy headphones good for only a narrow range of music, bought for billions. Total waste of money.

 

[kaldezar]

Bose is a billion times better than Beats

Johnson&johnson make excellent cotton buds, try them to clean your ears out if you really think Bose are a billion times better....if that doesn't work you should book an appointment with a good audiologist

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Sound is pretty good imho, sure they are no B&W, Senheiser or JBL but they sound good, too much basses but this is the sound young users wants.

Valid points but do you really need to spend 3 billion dollars to make a crappy bass heavy headphone?

 

[peterdevries]

Another voice here that cannot understand this. Base heavy headphones good for only a narrow range of music, bought for billions. Total waste of money.

It is understandable if you don't look at it from the point of view "Would I buy an Apple Beats Headphone?" and in stead look at it from the Apple business side "How can we enter the headphones market quickly and attain a sizeable market share with our key demographic for music (kids, young adults)?".