Apple's Jimmy Iovine and Dr. Dre Ordered to Pay $25 Million in Royalties to Former Beats Partner

[MacRumors]

Apple's Beats Electronics division today lost a lawsuit levied against it by Steven Lamar, who had a hand in the development of the Beats brand.

According to Bloomberg, a jury today decided that Lamar is entitled to $25 million due to a disputed settlement in 2007 with Beats co-founders and Apple execs Jimmy Iovine and Dr. Dre.

Lamar signed over the rights to the Beats design in exchange for royalties back in 2006. He claimed that under the terms of the settlement, he was owed royalties on all Beats models, while Dre and Iovine said he was entitled to royalties only on the original Studio model released in 2008, leading to a legal dispute.

The jury awarded Lamar royalties on all models of the Studio Beats headphones, but not on other models, an amount that could add up to a total of $40 million when interest and attorney fees are taken into account.

Lamar in 2006 claims to have shown a headphone design to Iovine, who recommended Dr. Dre as an endorser, creating the partnership that led to the creation of Beats Electronics. Lamar then helped to develop the Beats brand and the concept behind the headphones until he had a falling out with Iovine and Dre in 2006.

Apple purchased the Beats brand in 2014 for $3 billion, with Jimmy Iovine and Dr. Dre (otherwise known as Andre Young) joining Apple at that time. Since then, Apple has continued to sell products under the Beats label.

Article Link: Apple's Jimmy Iovine and Dr. Dre Ordered to Pay $25 Million in Royalties to Former Beats Partner

 

[macduke]

Good. I can't stand those two!

 

[Danoc]

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[69Mustang]

Good. Purchasing Beats has been the biggest mistake CEO Cook did during his mandate.

Objectively or subjectively? I'm guessing subjectively cuz objectively you'd be wrong.

 

[Neepman]

Even though 25 million this isn't even couch cushion money for these two ,I bet they spend a few million on a appeal.

 

[lunarworks]

$25M is reasonable, considering the price they paid for Beats.

Good. Purchasing Beats has been the biggest mistake CEO Cook did during his mandate.

lol, how? They got Apple Music out if it, which many people are satisfied with.

 

[Danoc]

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[69Mustang]

Objectively. Apple and Beats have different demographics, different types of branding. Apple is a higher end, more thoughtful technology company. You don’t expect Burberry to merge with H&M.

I don’t care the earnings, nobody wants Apple to buy Coca Cola.

Apple didn’t need an audio company to do products. The AirPods are the best, small wireless headphones ever created, under Apple’s umbrella, under Apple’s branding. I expect the same thing next year with over ear noise cancelling headphones. Then Apple will retire Beats.

One of us doesn't seem to know what objective means, objectively speaking. Your analysis is entirely subjective and you double down on it by trying to dismiss the most objective criteria - the numbers. Even your subjective evaluation misses it's mark. Apple sold Beats in their stores and online well before they acquired the company so... yeah. That description of higher end and more thoughtful - even more subjective.

Here. Maybe this will help.
ob·jec·tive
əbˈjektiv/
adjective

1. (of a person or their judgment) not influenced by personal feelings or opinions in considering and representing facts.

 

[Danoc]

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[69Mustang]

Ok, fair enough. But I still believe it’s objective to say that Apple and Beats are not in the same league, branding wise, and technology wise.

You're doing that thing my kids do. They love to say literally as a substitute for figuratively. You're doing the same thing with objective and subjective. It's cool. I understand the message you're trying to convey.

 

[Apple4r1]

Objectively. Apple and Beats have different demographics, different types of branding. Apple is a higher end, more thoughtful technology company. You don’t expect Burberry to merge with H&M.

I don’t care the earnings, nobody wants Apple to buy Coca Cola.

Apple didn’t need an audio company to do products. The AirPods are the best, small wireless headphones ever created, under Apple’s umbrella, under Apple’s branding. I expect the same thing next year with over ear noise cancelling headphones. Then Apple will retire Beats.

I think you misunderstood why Apple bought Beats. They didn’t buy it because of its hardware but because of Beats Music. They wanted the branding and talent from Beats.

 

[lunarworks]

Objectively. Apple and Beats have different demographics, different types of branding. Apple is a higher end, more thoughtful technology company. You don’t expect Burberry to merge with H&M.

I don’t care the earnings, nobody wants Apple to buy Coca Cola.

Apple didn’t need an audio company to do products. The AirPods are the best, small wireless headphones ever created, under Apple’s umbrella, under Apple’s branding. I expect the same thing next year with over ear noise cancelling headphones. Then Apple will retire Beats.

Why would Apple retire Beats when, as you said, they appeal to a different demographic? That's literally throwing away customers.

(Expected response: "Not updating the Mac is throwing away customers.")

 

[Robert.Walter]

Good. Purchasing Beats has been the biggest mistake CEO Cook did during his mandate.

People that know things would not only disagree with you, they would likely do do with a chuckle.

 

[Danoc]

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[DeepIn2U]

Good. I can't stand those two!

Why they hate? Where is this rooted?

That a former DJ created mix beats paid royalties via the original production label for NWA and created a NEW Genre of Rap music that became the norm and highlighted a world many well to do had no IDEA about?

That a production music mogul partnered with Dre & Lamar and created good quality headphones that created a marketing GENIUS the globe over because well B&W/B&O/BOSE etc couldn't dream of climbing from start up that fast?

Sincerely where is the hate coming from.

This is a debt Apple incurred. I recall this case that lingered prior to Apple purchasing Beats Inc. I also recall the disbandment from Monster Inc from Beats just prior to this as well.

This is just the first decision which means it could be contested. I honestly don't think it'll hurt either nor Apple one small bit.

 

[lunarworks]

Brands can be damaged in many ways. Look at the recent history of Lacoste for example, a classic example of an excellent brand trying to be popular. (Yahoo quote: “Lacoste hit a long lull a few years ago, hurt by an overexposure that damaged its cachet and a misguided attempt to be a fashion brand.” https://ca.finance.yahoo.com/news/retooled-lacoste-became-upscale-brand-160053822.html).

Ok, so what is being damaged and in what way?

If you're talking about "fashion brand", that's been a thing since the height of the iPod.

 

[jaster2]

And don’t forget the other guys Dre and Iovine screwed over in the development of Beats:
https://gizmodo.com/5981823/beat-by-dre-the-inside-story-of-how-monster-lost-the-world

 

[Regime2008]

Apple and Beats should be sued for the poor audio quality of it's products.

 

[DeepIn2U]

Apple and Beats should be sued for the poor audio quality of it's products.

No need for that ... Apple's audio engineering team has BIG plans for the future. IF this lawsuit gets ugly or is a debt assumed by Apple for purchasing Beats ... that product line could die a slow death. Who knows.

 

[Sefstah]

Lets buy Beats for 3 billion, then remove the headphone jack from the iPhone!!
Now thats what I call, smart.

 

[pete2106]

I don't really care about the article. I'm just here for this war over the difference between subjective and objective.

 

[manu chao]

Ok, fair enough. But I still believe it’s objective to say that Apple and Beats are not in the same league, branding wise, and technology wise.

Because Apple headphones were known for higher audio quality than Beats headphones? And Apple was the cooler brand of the two?

Sure, Apple’s brand and Beats’ brand are somewhat different. But not so different that Apple damaged its brand by associating the two. In fact, exactly because their brand appeal is different did the acquisition allow Apple to widen its combined brand appeal. And in technology there is a continuous, even overlapping, range from Beats products to Apple products. The AirPods’ W1 chip being used in several Beats products is testament to that.

And that is all before even considering how much the Beats acquisition allowed Apple to jumpstart its entry into the music streaming business with no discernible negative effect of the original Beats name on today’s Apple Music brand.

 

[KUKitch]

And don’t forget the other guys Dre and Iovine screwed over in the development of Beats:
https://gizmodo.com/5981823/beat-by-dre-the-inside-story-of-how-monster-lost-the-world

The last people I'm going to feel sorry for are the guys selling $99 'gold-plated' HDMI cables...

 

[manu chao]

Ok, so what is being damaged and in what way?

If you're talking about "fashion brand", that's been a thing since the height of the iPod.

Apple’s association with music (with a youth culture slant to it) has always been seen as a positive thing and was leveraged into the iPhone brand. If anything, Apple’s brand in that area had become a bit stale and the acquisition of Beats gave Apple a shot in the arm in that regard. I am really puzzled as to how the Beats acquisition could be seen as damaging the Apple brand. In the contrary, it added coolness and expanded it.

 

[Jimmy James]

Doctor Dray.