Apple to Announce Beats Acquisition This Week, Drops Price to $3 Billion

[theheadguy]

Look, I hate these headphones. They suck, they are terribly overpriced..however would you care to explain to me what is wrong with Apple wanting only a revenue stream from the sale of the headphones? Isn't Apple running a business to make money?

Because they suck and are terribly overpriced?

 

[s2mikey]

Oh good,a MUCH better value at just 3 billion. Right.

 

[HenryDJP]

Because they suck and are terribly overpriced?

Oh, my bad. I didn't realize Apple should only want to make money on products that techies and audiophiles approve of. Truth of the matter is sucky and overpriced as the Beats are they are HUGE revenue streamers and that's what counts in the bottom line. Kids and fans of rap music generally aren't looking at the Sennheisers, Bower & Wilkins, Bang & Olufson or AKG's. They want what the rappers and sports stars showcase and they are the Beats Headphones. Sad as that is.

 

[TallManNY]

Very crude analysis. Seriously, I totally agree with you about the headphones, but just like Apple's overpriced and underperforming machines, the Beats are a class/status kinda thing.

I have no clue what Apple is or may do with the company, or what they get out of it other than more money (because let's face it, Apple isn't going to do anything that doesn't make them richer) but at least we shouldn't profess to know what's better for them, or claim that another company's product is "X"

"X" being what Apple has been called for over a decade.

Yes, but the claims that Apple phones are status symbols and overpriced were just wrong. There are very clear differences in performance between an Apple phone and much cheaper phones. Compared to a falgship Smsung, not much difference, but also not much difference in price. So those claims were false.

The Beats headphones are , unequivocally, poor performers for the cash. It is easy to state this because they have only one function, to produce sound and can test that function against other headphones at their price point and cheaper. So primarily they are fashion statement. The iPhone has never been a fashion statement. And if, maybe, it once was while rare, it certainly hasn't been one for years now. It is ubiquitous in the US. You get no fashion points for using it. It does not distinguish you in any meaningful way.

But Beats just has to be popular for a few more years to make back this investment. And it might even get more popular. Now it is associated with the richest hip hop dude of all time. Doesn't that make Beats even cooler? Maybe it does.

 

[Lazy]

it's a free country (for a little longer anyway) so we can dislike who we want but I think you're wrong I know just as many people that find Iovine to be sleazy snake oil salesman - his pull in the music industry has been waning for years as is the Fad'ish popularity of Beats Headphones - they are by very definition the kinda product that's popular 3-5 years and then after embarrassing to own - i think Beats are on the verge of embarrassing to own status already!

Re your last comment, that would be exactly why it'd be a great time to sell. Projections about how profits will pay for the deal in a few years are just that, projections. It might well turn out that way, but it might also turn out that Dre will laugh his ass off for the rest of his life about how Apple way overpaid him.

 

[vixster1901]

mog

Can someone explain why Apple just didn't buy MOG ? being Beats purchased Mog a 1/2 year ago. I see some loop hole here. Some sort of collusion? Ideas???
Headphones STINK, any audiophile or a person who values quality audio know this.

 

[karlwig]

I'm not too familiar with american newspapers, but isn't New York Post considered pretty tabloid and unreliable?

 

[Benjamins]

I'm not too familiar with american newspapers, but isn't New York Post considered pretty tabloid and unreliable?

nope definitely legit lol

 

[Lazy]

With all the Beats bashing going on here, I'm tempted to give them a try...

I succumbed to that temptation a week or two ago. (Convenient that Target had a listening station I was passing by.)

They actually aren't bad, if you don't mind or actually like the bass boost. However way too expensive for what you get, as every rational commentator here has pointed out.

And the demo station was very slick and expensive: a large thick softly lit acrylic panel to hold the phones, with a large wide LCD panel behind it playing music video stuff. Obviously they can only afford that because the products are high margin (no crime there, more power to them for being able to get margins every business would love). But without lasting value (i.e. something besides being trendy) backing up that high margin (something Apple is good at) the Beats gravy train could derail at any time.

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Except that yes, Beats licenses are transferable.

Well if that's true, and the license term doesn't expire for many years, then this might well be a good move by Apple. My negative attitude would turn around completely if they announced that they bought Beats for the awesome licenses, and oh yeah, they're going to discontinue the headphones. No way that will happen though; they'd just sell the headphone business.

 

[PatriotInvasion]

Well if that's true, and the license term doesn't expire for many years, then this might well be a good move by Apple. My negative attitude would turn around completely if they announced that they bought Beats for the awesome licenses, and oh yeah, they're going to discontinue the headphones. No way that will happen though; they'd just sell the headphone business.

Assuming the Beats Music app and licensees morph into an iTunes subscription service option, I think they can keep the Beats by Dre headphone line as a separate Beats branded subsidiary to fund the acquisition over time. After a few years, they could sell off the headphone business or choose to foster it with help from Apple engineers.

 

[Warbrain]

The fact that people are still upset over this shows that it's a good acquisition.

 

[lazard]

The fact that people are still upset over this shows that it's a good acquisition.

Amazing logic reasoning

 

[Warbrain]

Amazing logic reasoning

The vast majority of people posting on a forum don't have a single bit of business sense.

 

[dBeats]

Maybe since I never paid much attention to them, but since this was announced I've been looking at the types of headphones people wear and I'm totally shocked at how many Beats headphones are out there. I see them all over the place. So say what you want, they made wearable technology cool for a lot of people.

 

[Benjamins]

Maybe since I never paid much attention to them, but since this was announced I've been looking at the types of headphones people wear and I'm totally shocked at how many Beats headphones are out there. I see them all over the place. So say what you want, they made wearable technology cool for a lot of people.

headphone = wearable technology.... maybe in the 19th century. Just like glasses were wearable technology in the 13th century.

 

[Wiesenlooser]

You are ignoring several things here.

1) The iconic iPod earphones were free.
2) The iPod sound quality was indeed below what an audiophile would like, but it was far better than nearly every other competitor. It is only within the last couple of years products such as the Geek wave are entering the picture, focusing on high fidelity sound.
3) The iPod's biggest selling point was the ridiculous ease of use, and its click wheel interface was light years ahead of anything else.

Reducing the iPod to the headphones which were packed with it for free is missing the forest for the trees.

1) you could also buy them. Since they broke so quickly a lot of people probably did.
2) No it wasnt. It actually was inferier compared to products like creative , cowon, iriver. The iPod was among the worst sound quality wise
3) That is only true by parts. It was also an icon and alot of branding. Or why do you think did they advertise the heck out of those white earbuds? So people knew when you had an iPod

 

[Mattjeff]

People should have had more faith in the iPad, because it was a recently introduced Apple product that was untested. This is a high end brand buying a low end brand, completely different.

I would have been more excited about Apple buying Tesla, T-Mobile, or pretty much anything else.

Apple buying tesla would have been sick!

 

[VMMan]

Look, I hate these headphones. They suck, they are terribly overpriced..however would you care to explain to me what is wrong with Apple wanting only a revenue stream from the sale of the headphones? Isn't Apple running a business to make money?

It is difficult for the vast majority of CEOs to manage acquisitions.

Recall that Steve Jobs when he first returned to a financially ailng Apple eliminated the only profitable segments of Apple because he thought those businesses, although the only profitable ones, were not core to Apple's vision.

 

[Digital Skunk]

Yes, but the claims that Apple phones are status symbols and overpriced were just wrong. There are very clear differences in performance between an Apple phone and much cheaper phones. Compared to a falgship Smsung, not much difference, but also not much difference in price. So those claims were false.

The Beats headphones are , unequivocally, poor performers for the cash. It is easy to state this because they have only one function, to produce sound and can test that function against other headphones at their price point and cheaper. So primarily they are fashion statement. The iPhone has never been a fashion statement. And if, maybe, it once was while rare, it certainly hasn't been one for years now. It is ubiquitous in the US. You get no fashion points for using it. It does not distinguish you in any meaningful way.

But Beats just has to be popular for a few more years to make back this investment. And it might even get more popular. Now it is associated with the richest hip hop dude of all time. Doesn't that make Beats even cooler? Maybe it does.

I didn't say anything about phones.

Seriously though I agree. Beats are a fashion statement, but so was ( and is ) the iPhone. Heck the iPhone 5c even.

Beat . . . . . yeah, they are eye candy. Not arguing that. They are mediocre . . . I've honestly never used them extensively so I will take your word for it. At $100 and up, I am looking for audio monitors from Sennheiser, M-Audio or Sony.

But, does pop culture appeal to Apple? I think so, and Beats are the iconic electronic for Pop culture like the iPod was in the early 2000's

 

[Bensalama21]

Yes! Love that this is coming true and eating at the hearts of all the buffoons on these forums that spewed nonsense and subliminal racism over the past 2 weeks. A few parting thoughts:

1.) The Beats Music app is awesome on iPhone and iPad and makes iTunes look tired and old
2.) Beats Music features every genre of music, not just hip-hop for you ill-informed
3.) The executive team at Apple is smarter than you and is likely to have thought everything through before forking over $3,000,000,000. Certainly more than your sensationalistic opinions on MacRumors.com Forums.
4.) Jimmy Iovine and Dr. Dre built a billion dollar business together - what have you done over the past 6 years?
5.) No one cares what you "audiophiles" think sounds the best. Hilarious how all you guys just throw out random brands that no one has ever heard of and declare them the best quality. Perhaps those brands should learn from Beats and figure out how to get people to spend $200-$400 on headphones to drive $1B in revenue per year. That's what Apple cares about.

Thank you... It's not like Beats forced people to buy them at gunpoint. Beats headphones are doing something right in order to be worth billions and have hundreds of millions in revenue.

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I'm not too familiar with american newspapers, but isn't New York Post considered pretty tabloid and unreliable?

It's definitely a tabloid, so yes!

 

[chrisbru]

If Apple tells them I am going to give you 3 billion up front, and profit sharing down the line, I doubt any of them are going to not give Apple the license. This is essentially what this is.

But it is strongly speeding up the process, and acquiring two leaders with intimate knowledge and experience in the music industry at the same time.

$3B is a ton of money, but I'm not going to conclude that this acquisition is a bad idea.

 

[Dustman]

how many more headphones do you think will sell if they're apple&beats branded vs. beats alone?

even if nothing changed from the current iteration of beats?.. once they go through the apple engineers for a couple iterations, i'd be willing to be that even the more vocal naysayers in the threads will eventually buy a set.

Agreed. I only see this as being good. I'd actually be more likely to actually buy a pair of beats if they were designed and engineered by Apple.