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Beats CEO Jimmy Iovine in Talks to Join Apple as 'Special Adviser'

apple really needs to stop incorporating these loser CEOs into it's ranks. They're the snake oil salesmen of the world and actually contribute nothing of worth to a company like apple that is already running just fine.

I really hope this isn't an advisory role as creatively beats is devoid of that particular quality, lets hope there is something else apple is interested in or this is being blown out of proportion.
 
Mockenrue said:
A good streaming service can be had for a lot less. MOG (which became Beats Music) was purchased for $14 million less than 2 years ago. I'm sure rdio could be picked up for a small fraction of this price. Like it or not, Apple is paying a premium for the lifestyle/branding/reputation of Beats.
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Is it really that crazy? Private sources indicate Beats Electronics is generating over $1 billion in annual revenue. Considering the branding/cachet, I don't think it's ridiculous to think they're generating 20% net profit margins, or north of $200 million hitting the bottom line annually from that business. Therefore the current purchase price slaps an approximate 15x multiple on the (growing) hardware business, which is lower than the multiple for the overall S&P 500. And you get the streaming business and the potential that comes with that (that's the coveted bit). Compare this to Google buying Motorola or Facebook buying WhatsApp and it's an absolute steal. Get cash flow from hardware, and they use the heft of the iTunes customer database to monetize the streaming business and more importantly stay relevant in the music services business, which is a selling point for iPhone and iPad hardware. Apple's learned it's better to control key services than be at the mercy of others. Maps, for instance, may be a perceived fiasco (I don't use it, but plenty apparently do) but it drove innovation overall in an important segment. Otherwise, you might not have turn by turn on your phone yet. Apple will have a much easier go of it monetizing the streaming portion of this streaming business than Facebook will trying to monetize WhatsApp.
 
ihcac said:
Is it really that crazy? Private sources indicate Beats Electronics is generating over $1 billion in annual revenue. Considering the branding/cachet, I don't think it's ridiculous to think they're generating 20% net profit margins, or north of $200 million hitting the bottom line annually from that business.
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It all hinges on what you described as branding/cachet. "Status" is an important part of Apple branding, so Beats fits in that sense. But many view Beats as lower quality from a technology standpoint, and there's a certain tackyness about their image. I suspect that many Apple fans rolled their eyes at marketing terms like "Boom Sound" on competing phones.

There are other more mature music services with bigger user bases and much lower price tags if that's the major play.
 
Spotify won the streaming game

Pandora is months away from running out of capital

this is like someone buying AskJeeves when Google was still cheap/affordable

one of thee worst blunders and mis-steps Apple as ever made
 
Additional point...

You don't buy Rdio because Beats brings a set of executives with extensive, extensive credibility throughout all levels of the music/media industry, which could make everything from negotiating license deals to working with talent that much easier. Apple has had trouble with this in the past and delays hurt. People like Iovine and Dre matter when dealing with "good ole' boy" industries like music/media.
 
Beats headphones are mediocre, but marketing fabulously. This deal is not about the headphones, it's about the beats music service that will become iTunes radio. In that respect, it may become a legitimate contender to Spotify. I listen to iTunes radio and have enjoyed it so far.
 
Alumeenium said:
Spotify won the streaming game

Pandora is months away from running out of capital

this is like someone buying AskJeeves when Google was still cheap/affordable

one of thee worst blunders and mis-steps Apple as ever made
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I love the hyperbole. Really? They could pay $3.2 billion, write the ENTIRE business off as a failure the next day, and only have "wasted" 2.1% of their cash. Apple generated $53 billion in operating cash flow last year alone. I somehow don't think this is going to ruin the company if something goes wrong.

As for better companies out there in response to another poster, what other companies out there potentially cash flow to the tune of $200 million per annum, have a fully functional on demand streaming service (the key strategic piece), and have an executive team that has more extensive contacts in the industry than any other company in the space? The AskJeeves reference is ludicrous. Even though Spotify has a bigger subscriber base, you can make an argument that Beats is in a better position right now because they actually run a profitable business overall. Spotify is a loss-generating, cash-burning company (commoditized too) dependent at present on the kindness of investors continuing to invest.
 
Ignoring Jimmy Iovine's business acumen and how it could help Apple, here's Macklemore's outlook on Jimmy Iovine...
https://www.youtube.com/watch?v=9RwW6ERgpvo&feature=kp

Iovine:
"We’ll give you a hundred thousand dollars
After your album comes out, we’ll need back that money that you borrowed"

Macklemore:
"So it’s really like a loan?"

Iovine:
"Alone?! Come on, no
We're a team, 360 degrees, we will reach your goals!
You'll get a third of the merch that you sell out on the road
Along with a third of the money you make when you’re out doing your shows
Manager gets twenty, booking agent gets ten
So ****, after taxes, you and Ryan have 7% to split!
That’s not bad, I’ve seen a lot worse
No one will give you a better offer than us"

http://rapgenius.com/Macklemore-and-ryan-lewis-jimmy-iovine-lyrics

Apple currently takes 30% of app / music sales... but opened it up so recording artists could get 70% if they self-publish. Hopefully Iovine would not push to increase Apple's margins on this front...

Note that the iTunes album for Macklemore's The Heist album says Macklemore, LLC. Sounds like he and Ryan Lewis are getting their 70%!
 
Alumeenium said:
Spotify won the streaming game

Pandora is months away from running out of capital

this is like someone buying AskJeeves when Google was still cheap/affordable

one of thee worst blunders and mis-steps Apple as ever made
Click to expand...

Spotify has far from won the streaming game. It's the known brand but that doesn't mean that they've won.

If Apple starts their own streaming service AND provides it for free with every iOS device bought while offering it on Android and Windows Phone? They win hands down.
 
gnasher729 said:
Quote: "According to the U.S. Treasury, "In $100 bills, the weight of $1
million is about 22 pounds." [that's 10 kg.]"

Three billion dollars in $100 bills would be about 30,000 kg or 30 metric tons.
Click to expand...

Guess what? My math was figured on $1 bills :D Which I see now the OP mentioned $100 bills oh well!
 
cdmoore74 said:
Not in a good way. Why not take that 3 billion and make your own high end headphones. Do something innovative not yet seen like when the iPad came out. 3 freaking billion is a ton of cash. Hell, I bet it weighs that much in $100 bills.
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Yeah the iPad was the paragon of innovation. An enormous iPhone with the phone part taken out: innovative!

----------
Warbrain said:
Spotify has far from won the streaming game. It's the known brand but that doesn't mean that they've won.

If Apple starts their own streaming service AND provides it for free with every iOS device bought while offering it on Android and Windows Phone? They win hands down.
Click to expand...

PAHAHAHAHA

Yeah they're gonna spend $3bil to curate a service for FREE. Makes perfect sense! Let's think. Three billion spent plus zero dollars earned equals... sometime around NEVER for the service to become a sound business decision.

More than that, you guys realize the amount of money Apple makes from iTunes downloads? Why in the HELL would they just GIVE away a service that allows people access to their library? Sure, spend three billion dollars and undercut their huge digital store. That sounds like something Apple would do.

Spotify is the Google of streaming. They're gigantic. Beats has failed incredibly hard and that's why they're getting swallowed up by Apple. Iovine and Dre are bailing before it turns into a financial albatross.
 
Focal

This is really a bad sign for the future of Apple. FOCAL and APPLE would have been the perfect combination.
 
nebo1ss said:
I have news for you. There is already an Apple records it is owned by the Beatles.
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Oh I'm quite aware, which is the whole reason I used that name/label. You know, given their whole previous legal dispute and the eventual conclusion that Apple wasn't going to get into the music business...
 
pjh said:
I would go one step further, it pedo-creppy.
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Wow, and my comment about Beats headphones sucking and hoping Apple doesn't use the technology was called asinine......

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oned said:
This is really a bad sign for the future of Apple. FOCAL and APPLE would have been the perfect combination.
Click to expand...

And watch the whole "APPLE ISN'T BUYING BEATS FOR THEIR HEADPHONES" hate posts roll in for you. So many people on here can't handle the fact that Apple MAY make stupid mistakes. Actually wait.... they have. Heaven forbid that a human running a company may make a mistake.

If I were to entertain your comment, FOCAL+APOGEE+APPLE would be awesome. But since Apple is more consumer focused they could just buy beats, take 5 minutes and redesign the looks of the headphone, slap an Apple logo on it sell it and have all the fanboys sing praise of how the new and improved design is superior over the original beats headphone while the technology is identical.

Hell, if Apple did the same thing but slapped an android/Google logo on it but didn't tell anybody, the same fanboys would tear it to shreds and talk about how it's the worst headphones in the world and claim it's the demise of Google as we know it. Then go on about how the new rebranded Beats to Apple headphones are better.
 
darkplanets said:
Oh I'm quite aware, which is the whole reason I used that name/label. You know, given their whole previous legal dispute and the eventual conclusion that Apple wasn't going to get into the music business...
Click to expand...

That's why there were three law suits. The first was over the name and Apple computers lost paid up and it was agreed they could use the name but stay in the computer business and never to get into the Music business. When they broke that agreement they were sued again and lost again and paid up more millions with a slightly different agreement that allowed them some access to the music business. Then they broke the second agreement and got sued and lost again and paid up more millions.

I am pretty sure that the last suit in 2003 still prevents them getting into the record business.
 
nebo1ss said:
That's why there were three law suits. The first was over the name and Apple computers lost paid up and it was agreed they could use the name but stay in the computer business and never to get into the Music business. When they broke that agreement they were sued again and lost again and paid up more millions with a slightly different agreement that allowed them some access to the music business. Then they broke the second agreement and got sued and lost again and paid up more millions.

I am pretty sure that the last suit in 2003 still prevents them getting into the record business.
Click to expand...

The original comment was a sarcastic comment, not a serious disposition (I mean really, Dre is never going to release his last album :cool:).

If anything though, your comment only highlights how little Apple cares about the previous precedents. If it was actually viable and not an entirely laughable tongue-and-cheek response, they would do it in a heartbeat.
 
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