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

[HiRez]

I doubt this is about Apple coveting Beats earphones. I strongly suspect the contracts they have signed with the record labels is a major factor, the streaming and subscription-based technology they have developed, and they may also own patents or other IP.

At the same time they are removing a major competitor (who is on the rise) from their music business, and depriving Android/PC makers from using the Beats branding in their devices. Say what you want about them (I personally think their gear sucks), but they have a name that sells products.

 

[mtneer]

Because it would cost Apple $5 billion + to buy Spotify considering there's talk a Spotify IPO will happen in the $6 billion to $8 billion range. Spotify was valued at $4 billion in a financing round last year.

I agree with the added cost. But Apple, of all people, should know you get what you pay for! Spotify may cost Apple twice as much, but can they be worth many times more than Beats? Well, I guess the point is moot, some MBA in Cupertino has already got this figured.. or Spotify probably said they are not for sale.

 

[mj1108]

It would be awesome if the iPhone 6 comes with Beats headphones!

Make it come true Timmy Cook!

iPhone 6 with Beats audio.

They must have bought them for patents and licensing. Their products aren't worth it. They are only popular for the style, not because they are actually any good.

 

[Bubba Satori]

They'll need to be slimmer, lighter and twice as expensive.

 

[g0odfr1end102]

Interesting news, although I'd prefer seeing Apple negotiating with Bose

 

[dazed]

Beats must be really, really bad then.

I've read some audiophile forums before, and no one ever agrees on anything - except for one thing - they all agree that Bose is the worst.

Yes, everyone whose an audiophile has told me that too.

"No Highs or Lows? Then it must be a Bose"

 

[ihcac]

I agree with the added cost. But Apple, of all people, should know you get what you pay for! Spotify may cost Apple twice as much, but can they be worth many times more than Beats? Well, I guess the point is moot, some MBA in Cupertino has already got this figured.. or Spotify probably said they are not for sale.

Apple is most likely just going to slap the Apple brand on it anyway. As someone pointed out above, there are several defensive angles here too. As such, for what Apple is hoping to accomplish, I don't think paying twice the current leaked price for Spotify's brand equity/premium makes much sense.

 

[quickcalibre]

This isn't a bad buy by apple nor a great one.

If the rumour is true.

It's just an average one.

The music streaming software will probably make things easier, in patents and other features.

And htc which uses beats speakers integrated is superior compared to the iPhones speakers.

However in audio tech, other companies such as akg or sennhieser are vastly better in sound quality.

 

[The Doctor11]

I dont think apple should buy beats. And I think the Apple earpods are great

 

[CL4W]

Replies in this thread are beyond hilarious. So many keyboard warriors think they know whats best for Apple...*laughs*

If they do buy BEATS, they will be buying its intellectual property, that's where the money is.

 

[wheelhot]

Can't believe this is true, and for 3.2 billion? Is there no one at Apple who told Tim how bad Beats headphones really are?

 

[Kariya]

People need to calm down and set aside their visceral reaction to the headphones (which are actually very decent if not spectacular).

iTunes, Final Cut, iMovie, DVD Studio. Were all outside brands that Apple turned into industry standards.

Apple isn't buying Beats for the headphones. They want the streaming service, licensing and IP. A Beats streaming service linked with iTunes is a no brainer. Two massive brands that consumers (and artists) recognise and will use.

The headphones are just a bonus component.

Jeez some people acting like Apple just made a deal with a Nazi.

 

[scottsjack]

Interesting news, although I'd prefer seeing Apple negotiating with Bose

I would prefer seeing Apple introduce a new mini with current technology, a midi for enthusiasts and a modern ACD with USB3, TB2 and iMac screen technology available to both sizes. Screw headphones.

 

[SHNXX]

as someone who believes in apple and has a small position in apple stocks, this is INCREDIBLY terrible news.

 

[wheelhot]

Replies in this thread are beyond hilarious. So many keyboard warriors think they know whats best for Apple...*laughs*

If they do buy BEATS, they will be buying its intellectual property, that's where the money is.

That could be, but for 3.2 billion? I wonder what IP Beats has over other better sound-orientated companies or other tech companies to worth that much

 

[NMBob]

That headband is pretty flat. Maybe Timmy is buying it for Jony. It's Jony's style. Might as well start making flat hardware, too.

 

[Arndroid]

Am I the only one that's totally surprised by this? Seems pretty random. And pointless IMO.

Beats will do over 1.5 billion in sales this year. They sell 60% of all high end headphones.

Apple gets the headphone line and can improve the quality. They get the streaming service they can use to expand iTunes streaming. Beats targets heavily at both young and urban markets.

It is also likely that beats is making a good net profit which makes a 3.2 billion dollar valuation a no brainer. If beats is netting 20% it is an amazing deal. 10%? Not as good but still a good deal.

I realize the demo for mac rumors is probably the exact opposite of Beats but people shouid educate themselves a bit more before making ignorant statements. The reality is most high end audio snobbery is bs anyways so when people diss on the alleged quality that has an impact on an imperceptible part of the market place.

Will be interesting to see if it happens. Being apple's largest acquisition, I suspect they have quite a lot in mind. If it goes through it will certainly be a better buy than google purchasing Mototola.

Tl;dr. Beats is dominant in market segments important to apple's future growth. Apple wants to make a bigger impact in streaming services and likely thinks the beats methodology could be helpful.

Doesn't really take a brain scientist or rocket surgeon to see potential there.

 

[Quu]

Although I think Beats audio is completely junk based on sound quality I do think aesthetically they are nice looking and the Beats brand is huge. Everywhere I go I see beats being worn by individuals.

I'd say in 2004-2010 all I saw was white earbuds. The signature of the iPod owner. Not anymore, now I see a sea of beats headphones.

If Apple is really thinking about buying Beats the brand has a lot of value that Apple could capitalize on.

 

[FantasyX]

I hope this is just a bad rumor!

 

[Technarchy]

Move makes perfect sense.

iTunes is a massive money maker for music purchasing. Apple doesn't want to disrupt that business model with offering iTunes streaming.

Buying Beats now gives Apple a multi-platform music streaming subscription service. Having access to Windows, Android, iOS and OSX is a massive pool of customers.

No need to negotiate with pain in the ass record companies. Beats already has a deal locked down. Apple's life is made easier.

Apple is instantly a player in the streaming music business.

I get the impression this has nothing to do with headphones.

 

[Arndroid]

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.

Yet they dominant their market space.

 

[iolinux333]

So many other companies have gone from making the best of the best to making over priced junk. Sometimes the end up being more profitable. That's what happens when the bean counters are in charge.

Examples:

Abercrombie & Fitch
Mercedes
Hewlett Packard
Ford
Remington
Winchester
Colt
BC Rich Guitars
Coca Cola
Craftsman
Black and Decker




All of them are still in business. The masses think all their junk is fabulous and they still pay all the bean counters that run them fabulous salaries and bonuses.

It will eventually be time for me to move on from Apple. It was nice while it lasted. Someone else will step up and take their place eventually. Jolla?

 

[furi0usbee]

It says "Beats Electronics." Is this a separate company from their streaming service, or does it encompass everything "Beats." If it's only the electronics portion, to me, that seems hardware stuff only, and not the streaming service. I could be/probably wrong, but that's what it looks like to me.

 

[Arndroid]

This made me sick to my stomach. I REALLY don't think this is true… waaaaaaaay too much money for a junk brand. Apple knows better than to throw away that kind of cash. They didn't buy Waze for 1B, no way they buy this for 3.2.

Leave out any synergy components. Strictly as a financial investment beats makes 1000x more sense at 3.2 billion than waze at one billion. There are actual numbers and stuff that factor into how much a company is worth.

 

[bighype]

If this is true, Tim Cook really needs to go. He's passed on out on some of the paradigm changing tech like Oculus Rift and is buying crappy headphone company instead.

Insane if true!