Love how I make a point, then you make a point, then I make a counterpoint, and you just give up.
At the current time, there are headphones called beats studio that are $349. Apples rumored to be introducing AirPods studio, and guess what? Also $349. Coincidence? I think not.
The Apple music chief just moved over to the beats headphone division. Also coincidence? I think not.
There are sporty earbuds that beats has called the beats X.
guess what’s rumored for this fall?AirPods X.
Again, coincidence? No.
Like I said, at the moment, beets will be sticking around because there’s only two versions of AirPods. But once we get the cheaper AirPods, and the AirPods X, and the regular AirPods, AirPods Pro, and AirPods studio, beats will no longer serve a purpose.
At the peak of the popularity of beets, they were making around $1.5 billion. They’re not as popular as they used to be. Current estimations put beats profit at around $300 million.
Meanwhile, the two models of AirPods made between 12 and $14 billion last year. So yeah, it’s obvious which one Apple cares more about.
Coincidences or not, here are some reasons that Beats may go on, (the Beats go on, the Beats go on....)
Apple-branded accessories (and yes, headphones are accessories) appeal mostly to people who use other Apple products. While there are Android phone owners who do use AirPods, the vast majority of AirPods owners are iPhone owners. Beats products, on the other hand, are purchased for use with a wide variety of non-Apple electronics, and there are an awful lot of people out there who use non-Apple electronics. In short, Beats helps Apple reach a very large market segment that the Apple brand does not reach.
Apple products are sold through a relatively limited lineup of Apple Authorized Resellers. Beats products are sold through a much larger network of dealers. Going Apple-only means losing all those additional "points of presence" (as they say in the marketing world). While Apple finds limited retail availability helps support the premium image/price of the Apple brand name, the Beats brand does not trade on exclusivity; it's a traditional mass-market brand. In mass-market, a lost point of presence is assumed to result in lost sales.
Maybe someday, far into the future, the Apple headphone brand may become so big and strong that abandoning Beats would cost the company nothing. But for the near future? I don't see it.
AirPods success fits into the predictions made when Apple eliminated the headphone jack - that Apple would find a way to sell extra-cost Bluetooth headphones to iPhone users. Although Apple hasn't stopped supplying wired EarPods free with every iPhone, you sure don't see as many people using them today as you did a couple of years ago. This is about first-time Bluetooth earphone buyers going with their preferred brand name, not existing Beats customers abandoning Beats for Apple.
Apple paid $3 billion for Beats. Of that $3 billion, most of the obvious, present value was in the brand name and the headphone product line, not the music service. The music service was valuable mostly for its potential - the core staff/infrastructure for a subscription-based entertainment service ("radio" stations, curated playlists, etc. that are only possible because the customer isn't buying individual songs/albums, but is able to listen to everything in the catalog).
Yes, Apple re-branded Beats Music to Apple Music. Beats Music was tiny, Apple's user base is huge. The world is even larger than Apple's user base, but Apple had done very, very well selling iTunes and App Store solely within its user base, so why worry about the world beyond Apple when rolling out its new subscription music service?
On the other hand, the Beats headphone brand is very big outside of the Apple ecosystem. Why throw that away that $3 billon brand name, unless it is losing money? Apple will discard product lines that don't make much money, but there's no evidence Beats is not making much money.
For evidence of that, let me point to FileMaker Pro (re-branded recently as Claris). Apple has owned this company for decades. It was never re-branded as an Apple product, never folded into AppleWorks alongside Pages, Numbers, and Keynote, or as Pro products like Final Cut Pro and Logic Pro. You can't get the Mac version of FileMaker Pro in the Mac App Store. The only iOS App Store product is a client that can access server/cloud-based implementations. FileMaker has yet to be closed down due to a small contribution to the corporate bottom line. It apparently turns a profit, so it continues to live its own life.
As I see it, an Apple over-the-ear headphone would be designed and marketed to compete against Bose, Sennheiser, etc. - traditional HiFi/audiophile brands. Beats, however, is not targeted at that audience. Will Beats lose some sales to Apple along the way? It's likely, considering the Apple fan base - some are currently buying Beats because they know it is owned by Apple. You can see exactly that in some of the comments in this thread. But I do not think this will rise to the level of "creative destruction."
And while it doesn't have anything to do with the comments quoted above, I think that these rumored Apple headphones will absolutely
not look like Beats-with-an-Apple-logo, just as AirPods look nothing like Beats earphones. They will be designed to be uniquely identifiable as Apple. Not only Think Different, but Look Different.
