Apple's Acquisition of Beats Met with Skepticism, but Jimmy Iovine May Be Key

[jbrett]

It's not just "expensive" headphones, these are hands down the hottest headphones on the market with serious brand recognition. It's clearly not about the technology, as everyone says that's half assed and they're not great headphones anyway.

It's also worth mentioning that at least one Android phone claims to have Beats audio "built it" to the phone... whatever the hell that means. But they are clearly going to lose that partnership fast.

It's a great upsell for people buying phones, Apple is already a big retailer and it could somehow be used to sway Android users over to Apple.

 

[NateTheVape420]

Marketing ?

Seriously?? I'm not even going to comment on the race thing, but what makes you think they're the best? Because they sell the most? Simple marketing. They are far from the best headphones you can get.

Ok so who comes out with a product and doesn't try and market it the best. Beats had the best Marketing because of DRE/Iovine. That with a combination of great looks and sound is why BEATS IS THE BEST. (Apple isn't the best phone maker ?) (Bose/Bang&Olufsen make a better headphone with all those components in mind ?) Never have Never will

 

[iolinux333]

Apple has been busting its chops for years to get a real streaming service going. iTunes Radio is OK, but its got no "soul" behind it. Apple doesn't have people that LOVE iTunes Radio fanatically.. The same way Apple loves making iPhones and iPads.
Beats has done the work to build a better, cross-platform service than Apple is going to get with just "suits" making deals.

Beats can replace iTunes radio with nothing lost, but Beats seems to have a lot more "love" put into making the best service they can... Apple craves that kind of thing

Songza and Spitify destroy Beats and iTunea.

 

[nikaru]

Apple acquiers normaly small companies because they have some potentialy good technologies as it was the case with Siri and TouchID. Buying Beats because they have some good contracts with the music labels with which Apple itslef has worked for ages, doesnt make any sense. Headphone business is also out of the question because their headphones are crappy. Whats left is just the brand and Apple wont acquire a company becuase of the brand. Music streaming service? Apple can code it in iTunes in a week. Even if 3 bilion is nothing for Apple, with that cash they can buy all tech kickstarter projects out there and get more talanted people, more great ideas and more potential....

 

[elgrecomac]

Dr Dre becomes hip-hops first BILLIONAIRE!

West coast, baby! Dr. Dre is gonna be banking some serious coin in all of this. He and his crew released a video announcing hip-hops first billionaire. Not bad for a man from Compton.

 

[iolinux333]

Never mind.

 

[pti6ity]

Reading the April fools thing that Guber posted and here as well...it's kind of wow. http://www.businessinsider.com/bob-lefsetz-on-apple-buying-beats-2014-5

What if that part of youtube was real

 

[dominic252]

Ok so who comes out with a product and doesn't try and market it the best. Beats had the best Marketing because of DRE/Iovine. That with a combination of great looks and sound is why BEATS IS THE BEST. (Apple isn't the best phone maker ?) (Bose/Bang&Olufsen make a better headphone with all those components in mind ?) Never have Never will

Well, yeah I'm not saying they aren't the best at marketing. They clearly are. They do a great job of that. I don't think they're the best sounding headphones, though

 

[techwhiz]

And it still doesn't make sense. Is Jimmy going to grow Apple's subscription business by $3 billion with spotify, rdio and others competing in that same space just because of his ties to music? I'm sure Apple could buy 100 music execs with that money.

And Jesus...I keep hearing people speculating about "incredible" headphone patents or technology. We are talking of fsking headphones. Used for listening to music. That's it. That isn't going to be growth business like anything Apple has released in the last 6 years.

You hit it on the head.
1. HTC sold back 25% of Beats back to Beats for $265 million in Spet. of last year. I can't see how the company tripled in value in 7 months.
2. Beats is a name where initially Monster Products did the design of the headphones.
3. If the streaming service does not do $3 billion in the first two years, then this was a grand waste of my shareholder equity.
4. It's not driver design because there are much better companies for driver design patents.

I'm an Apple shareholder and this was stupid.

 

[buzzardo]

There's a bar in San Francisco the Beats Music people hang out at. You can listen to them talk about exactly what it's like working for old celebrities.

I feel sorry for anyone at Apple that would have to work with them.

 

[elev8d]

It basically boils down to personal preference when it comes to look/sound. (But numbers don't lie) people wouldn't let a company grab 51% of a market if it didn't have the best product out i.e., (apple makes the best phone PERIOD)

(lets call a spade a spade pls)

So you joined MacRumors today, your name implies that you are under the influence, and you are implying that questions around the acquisition are race related.

It's common knowledge that Beats is not the most impressive company for audio quality or technology, however is a marketing powerhouse which has led to it's impressive market share. There hasn't been a single company prior to Beats to make wearing a specifically branded and recognizable set of headphones fashionable. No other headphone manufacture has used product placement or celebrity endorsement like Beats. No other headphone manufacturer has had consistent national on-air TV advertising. The audio quality of the headphones themselves are mid-tier, but the marketing (and product design from a fashion perspective) is top-notch.

Like someone mentioned earlier though. I think this goes deeper than just headphones, but may have to do with licensing deals with Interscope. Although, 1 billion in annual revenue is definitely very impressive.

 

[SmileyBlast!]

He has passion, but this is total crap!

I know what song comes next. It's not that big a problem.
This is a totally artificial and superficial problem/solution.

It's Ping all over again if this goes through.

This is not a market differentiator. It's just a waste of time.

I don't want 5 million other users trying to influence my musical taste.
I don't need it.

 

[IJ Reilly]

You hit it on the head.
1. HTC sold back 25% of Beats back to Beats for $265 million in Spet. of last year. I can't see how the company tripled in value in 7 months.
2. Beats is a name where initially Monster Products did the design of the headphones.
3. If the streaming service does not do $3 billion in the first two years, then this was a grand waste of my shareholder equity.
4. It's not driver design because there are much better companies for driver design patents.

I'm an Apple shareholder and this was stupid.

Do we know anything about HTC's equity agreement with Beats? If not, then that number doesn't mean anything.

If the $1B+ revenue annual revenue figure for Beats is accurate, and their margins are reasonable, then a present value calculation of $3B isn't off the mark.

You, as a shareholder, are losing no equity. Apple's cash reserves are not part of stockholder equity. If the acquisition drives earnings then the deal will be good for stockholder equity. Currently that cash is doing nothing for stockholders.

 

[daveathall]

Delete.

 

[iolinux333]

No just a huge fan of Beats/Apple and a very proud blk guy !!!!

Well I quit then. If I can't find anything better I guess I'll just go back to android. Apple is clearly no better than google at this point. I hope mozilla or jolla come up with something good soon.

 

[3N16MA]

Apple should buy Rdio.

 

[sk1wbw]

People are complaining about this purchase but yet at the same thing think that Facebook will change humanity with the purchase of Occulus. Go figure.

 

[NateTheVape420]

?

So you joined MacRumors today, your name implies that you are under the influence, and you are implying that questions around the acquisition are race related.

It's common knowledge that Beats is not the most impressive company for audio quality or technology, however is a marketing powerhouse which has led to it's impressive market share. There hasn't been a single company prior to Beats to make wearing a specifically branded and recognizable set of headphones fashionable. No other headphone manufacture has used product placement or celebrity endorsement like Beats. No other headphone manufacturer has had consistent national on-air TV advertising. The audio quality of the headphones themselves are mid-tier, but the marketing (and product design from a fashion perspective) is top-notch.

I have been a avid reader of macrumors for years never commented on anything I read until today (never felt strongly about anything on here as I do about this) these negative comments about beats are mind boggling to me thats like saying Apple is not the best when they clearly are or that Nike isn't the best at sneakers or that Google isn't the best thing on the internet. Until people stop denying greatness we will never be as great as we could be !!!!!

 

[EGlasheen]

I love it. Because outsiders "don't get it", or "are not aware of any intellectual property within Beats that would drive the acquisition justification beyond the brand", that automatically makes it a bad idea.

The most troubling is Munster's "investor note". How about not saying *anything* until there's more info about it, Gene? It's not like you're manipulating stocks or anything like that....

Patents owned by Beats electronics;



Patent Number Title Of Patent Date Issued
D692410 Gaming headset October 29, 2013

D660826 Audio listening system May 29, 2012

D659119 Audio speaker system May 8, 2012

D657345 Audio listening system April 10, 2012

D657344 Audio listening system April 10, 2012

D641736 Ear bud for an audio listening system July 19, 2011

D637999 Audio listening system May 17, 2011

D637998 Audio listening system May 17, 2011

D637176 Headphone May 3, 2011

D632668 Audio listening system February 15, 2011


Only 10...

I don't get it...

Ed

 

[NateTheVape420]

ok

Well I quit then. If I can't find anything better I guess I'll just go back to android. Apple is clearly no better than google at this point. I hope mozilla or jolla come up with something good soon.

well i understand your feeling but just so you know this is Macrumors not Googlerumors !!!

 

[lunarworks]

People were "angry and confused" when Apple launched the iPod.

Wait and see.

 

[nebo1ss]

Do we know anything about HTC's equity agreement with Beats? If not, then that number doesn't mean anything.

If the $1B+ revenue annual revenue figure for Beats is accurate, and their margins are reasonable, then a present value calculation of $3B isn't off the mark.

You, as a shareholder, are losing no equity. Apple's cash reserves are not part of stockholder equity. If the acquisition drives earnings then the deal will be good for stockholder equity. Currently that cash is doing nothing for stockholders.

What makes you think they will use the Cash to fund this acquisition. They will almost certainly go to the market to borrow the money because they will never repatriate that cash because it immediately becomes liable to taxes in the US.

 

[Jay42]

I think anyone criticizing this deal with any sort of reference to 'headphones' has it all wrong.

It's about content curation, AI, streaming, and licensing. That alone could be worth 3.2b. Apple is quickly losing to Spotify and the rest of the streaming services as consumers adopt an entirely new pricing structure mentality. iTunes radio didn't cut it, and Apple is all too aware.

Music is an important element in building Apple's 'ecosystem.' If users are no longer loyal to iTunes, and are now loyal to an app like Spotify which runs on any platform, it makes switching extremely easy.

 

[johncarync]

I figured it out...

Apple could supply Sapphire glass to Beats to make high-end headphones and speakers that are "invisible" and nearly indestructible. Make them uber stylish and patent the hell out of them.

Meh, maybe not.

 

[Gudi]

Apple's Acquisition of Beats Met with Skepticism, but Jimmy Iovine May Be Key

Interesting. This "special adviser" must give very special advice to be worth his 3.2 Instagrams.