Tells Us What You Really Think Of The Beats Apple Deal [We've Got Prizes!] - hypebot

« Beats Music Royalty Report Reveals Low Subscriber Numbers, Even Lower Payments To Artists | Main | Spotify Brings Upgrades To Windows Phone »

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

Better Deal

It Makes sense to me. I think Tim Cook is chasing steve jobs ghost. The Beats streaming service is the brain child of Jimmy Iovine and Steve Jobs. The hardware is lackluster after the split with monster in my opinion but the brand is ingrained in the publics perception as high end so the don't need to actually have a quality product for the next 2-3 years. By that time the streaming should be solid and ready to take down spotify.

Bruce Houghton

Great comment Good Deal, but if its mediocre tech and Apple has 2-3 years to catch up, why pay $3.2 billion?

Christopher Bright

I think 3.2 billion is quite a bit high, and Beats doesn't seem to line up with Apple's branding very well IMO. I realize kids like them, but they're not very good quality, and also kids can be quite fickle with their opinions of what's hot at the moment. Apple doesn't seem to be in a place where they need the $, either.

On the other side, Apple is a smart company, and if this deal is going through, they definitely have their reasons, and we all know they're not afraid to keep the public in the dark for their reasons why.

In the end, there's interesting ideas floating around as to what their motivations might be, but I still think Apple rue the risk of paying way too much for a brand that might end up tarnishing them. Just look at comments on Apple-related message boards. But, I suppose we'll find out shortly enough...

Shanelle

I think it's a great deal. I'm excited to see how Apple and Beats will come together to make both products superior. It's an exciting time for consumer goods.

Cxy

Apple is buying Beats because it’s scared of cheap Android phones. It needs the Beats brand to sell more iOS devices without devaluing the iPhone brand.

Android smartphone market share is overpowering iPhones (Gartner says 78.4% vs 15.6% in 2013) because Android phones are so much cheaper. The larger this disparity, the more likely app developers will focus on Android over iOS. If the flow of innovative new apps dries up on iOS, so will iPhone sales and Apple's profits.

Apple can fight this is by selling more iOS smartphones, which means it must compete directly with cheap Android phones. Apple tried to do this with the iPhone 5C but failed; Apple can't go cheaper with specs, materials, or pricing since it would devalue the Apple brand.

This is where the Beats makes sense - it's an already-established premium worldwide brand. It successfully sells headphones and speakers in the $99-$449 range that are never discounted. With its brand DNA tied to music, Beats has a deep emotional pull.

Applying the Beats brand to “unapologetically plastic” iOS smartphones would allow iOS to compete with Android without devaluing the Apple brand. iPhone 5C -> Beats 5C.

Is it worth $3.2B? Quite possibly yes. Consider how long and how expensive it was for Toyota to build its marginally-successful Scion brand. Purchasing Beats gives Apple a second premium brand in one fell swoop. And oh yeah, the headphone business, Beats Music, and Iovine & Dre are nice benefits too.

Z

The coverage on this as been embarrassing. People want apple for apple. Beats headphones are a fad. Their music service is a sinking ship. If true, then Tim Cook really has no idea what he is doing.

Jeff

This deal is the continuation of changing / phasing out of the iTunes model. What it really shows is the maturating of the Apple brand and the stagnation of innovation and market action that has happened internally in iTunes over the last few years. (Ping, ITunes Match, ITunes Radio, etc)

They could have purchased a Spotify, Rdio, or any of the other streaming services, but in this deal they get Jimmy Iovine and the ability to structure licensing agreements across the industry in their favor. (You know they want in at some outlandishly low rate) Now the risk they take in going that route is going against the global impact a Spotify has already implanted. Can Apple take Beats, and take that market share by infiltrating it within their own Apple eco-system and whatever new innovations / tech they have coming with iphone 6 and ios8?

Of course, the other part in this deal is the headphone company. Even though they never have really gotten into the "hard goods" market by acquisition, apple has operated in the past by using their iTunes software and store to entice users into using their hardware and and other high profit margin goods. This seems to be where the Beats model was trying to show to potential buyers in the market. Kudos to them for rolling that out in such a small time frame. Apple must feel that strategically, this all fits into their philosophy and what they have coming down the pipeline.

With the amount of money it takes to get into the streaming market (note that no streaming company has operated in the black as of yet) Apple feels for them to enter streaming and make it worth their while to their investors, having a headphone business tied in that takes in a significant profit must mitigate their risks and feel better at ease.

Apple has used music since 2003 to push their brand forward. This deal marks the death of iTunes and the beginning of iBeats and the continuation of that philosophy. Let's see what they bring to the table.

Jon Emery

This has nothing to do with headsets...its about locked-in licensing deals for Apple since the majors need to get paid and iovine and co have the content(at a favorable discounted rate)...call it a hunch

Tamas

I think it's a good move from Apple. The most important thing is that they have the same target group/audience, because both company have "premium category" products (higher price).

CjWymore

Here is why I think Apple's acquisition of Beats is a smart move and why it has nothing to do with headphones.

The fact of the matter is while Beats headphones are well branded and certainly profitable they just aren't that special...remember they're still just headphones. If Apple wanted to get into the designer headphone market they'd do it on their own terms and save $3.2 billion. We're talking about Apple after all, whose bread and butter is sleek looking, well branded, tech products.

So why Apple's interest in Beats?

Answer: Streaming

Music consumption is heading in two directions: streaming and, ironically enough, vinyl. Something tells me Apple isn't interested in selling wax LP's so if they want to stay relevant in the music industry they need to jump on the streaming ship before it sails. I'm not saying streaming is more profitable than MP3's or that MP3s and CD's are becoming obsolete but when you really look at streaming it just makes the most sense from a consumer perspective. STREAMING IS THE FUTURE OF MUSIC CONSUMPTION, whether Apple likes it or not.

More and more people (myself included) are switching from Itunes to streaming services because they're free, they provides a seemingly infinite music catalog and they don't require downloading, storing, and organizing a bunch of data. And if people can't put up with the ads they'll just pay the $10/month - which will only decrease as more people jump on board. In a nutshell, streaming music is incredibly user friendly and Apple is a user friendly company...so they need to get into streaming before some other company (AKA Spotify) becomes the go to source for music consumption.

If Apple does buy Beats, they are basically buying it's already established streaming service so they can perfect it and make it profitable. Why don't they start streaming without Beats? Beats me...probably because the Beats brand aligns well with Apple (they're both aesthetically pleasing, and are both grocery produce). Plus they will acquire two industry juggernauts in Dr. Dre and Jimmy Iovine who will only add to the brand recognition. And when you look at Apple's history, they have a tendency of perfecting already existing technologies. They made personal computing sleek and sexy with Macbooks and they made MP3s intuitive and mobile with Itunes and the IPod. Now they are going to perfect music streaming. Hopefully it puts money in the pockets of artists and not just Apple execs.

Orkun Tunc

Well, from my point of view; businesswise its a smart move.

First; Beats definitely teens choice of headphones because of the look, style and hipness. No matter the prices are high, kids wanna have it and they have bigger share in the market. This means using Beats headphones is cool.

Secondly; Most importantly, Apple buys the control of artists through Interscope and Aftermath. Right now Jimmy Iovine has all the cool acts in pop music; Gaga, Will.I.Am and many more.. Apple can plug their products(not just Beats) into their promo videos, posters and all related. This is really more than 3.2b$ worth. Cos without the artists you cannot promote the products.
Apple needs Dre and Iovine for this reason especially.

Thirdly; It becomes obvious that, music will be wearable product in the near future. I think Beats/Apple relation is one of the first attempt. I wait a move from Samsung, Sony; joint ventures with other tech companies etc.

Fourthly; Itunes is less cool now. They need an upgrade. Beats can give that new fresh feel to the audience. Music can be free or really cheap through subscription services but you will buy many tiny stuff related with your headphones etc. Great joint with struggling Itunes. Goodbye Spotify(maybe working in Scandinavia still), Goodbye Deezer(maybe working for music nerds, LP collectors, real music fans)..

These are my thoughts in general. And at the end, the music scene is all about being fresh, the new thing and fashion these days. I think this joint, if used in right places, can live for at least next 5-6 years..

Wieland

I guess Apple is a bit afraid while watching Facebooks (Oculus Rift, Whats App) and Googles (all this drone stuff and smart devices) shopping tour. Apple is trying to draw a line and show that they are number one in portable music and Facebook neither Google are going to attack their market.

Robert Caple

I think it's good and bad. It's good because they are obviously working hard to keep their products fashionable (after they hired ex-Burberry and Yves St Laurent CEOs) and they are keeping up with developments in sound technology. But, I think it's bad because it won't be just Apple anymore. It'll be Apple & Beats. They're integrating Beats a bit more than they should do. I think they should acquire Beats and mould them over time, whilst keeping them at arms length. Whereas, they are bringing in Lovine as an executive in the company to advise Cook on creative matters.

Apple are obviously attracted to the low streaming rates that Beats pay their artists, and aren't put off by the lack of paying customers. But, this deal keeps Apple relevant which is probably the main thing.

So it's good and bad. It'll be interesting to see what the T&Cs of the deal are.

Connor

I think it's a smart move because Apple obviously has a significant presence in manufacturing hardware for music playback and selling music and other audio content online, but they don't have a strong line of headphones or earphones and regardless of whether or not you think Beats headphones are over-valued and too expensive, they have an extremely strong consumer/fan base and support from well known public figures (even though they've been paid for it of course lol).

Brian Hazard

It's genius!

1. It keeps Apple looking young and fresh, in rebuttal to those Samsung commercials where teens' parents are waiting in line to buy the new iPhone. To my surprise, people really do think wearing Beats headphones all day is a cool thing to do, all over the country. I base this on a recent trip to Florida where travelers at all four airports I was stuck at were wearing them, from teens to middle aged business travelers.

2. iOS8 is set to include high definition audio, which requires a high definition playback system to appreciate. And let's face it - Beats headphones sound terrible. They've got at least a 15 dB bump in the low end. Cut that down to 10 dB and you've got a new an improved version with "brilliant highs you have to hear to believe."

3. They can integrate Beats Music with iTunes when the time is right. Surely it's a matter of when, not if. I figured their acquisition of Lala would do the trick, but I suppose that tech and the licenses are stale at this point. If they position Beats Music as the only source for high definition streaming audio, they've got a winner on their hands.

4. They've got the money, and their shareholders want to see it put to use. They can only buy back so much of their own stock, right?

Good move Apple!

Stephen

Lets face it Apple has become lack luster in the world of music since streaming took off. It's gearing up for a turn around so that it can tackle the rising success of Spotify, Pandora, and the handful of others that are capitalizing on licensing revenue. Ian Rodger is the tech mastermind behind beats streaming service and has been in the industry since the days of Yahoo music. Absorbing the Beats music platform (algos, Rodgers, Ilovine, customers, etc) is the main buy and adding another great source of revenue (headphones) is the kicker.

Chancius

Apple was able to obtain music download dominance with their product and website before anyone else could. They have since began to trail other companies when it comes to hardware and system. Every company involved with music has always resisted new technology. Why fix something that isn't broken? A lot of companies stop innovating when they hit a successful streak. Apple is now finding themselves in that same situation. They did not get into the streaming game early enough to compete with companies like Pandora or Spotify who now have the clout and exposure. It takes a lot of time and money to start from scratch and build a new infrastructure like this kind of business model. Purchasing beats kills two birds with one stone. They get the already established technological system and all the acts and subscribers that go along with it. Dre, Iovine, and Rogers are just the icing on the cake. Do I think the price is too high? Yes, but we're looking at a business model that has so much potential for making money in the future they figure it's worth the investment. The price is so high because they don't want to risk underpaying and risk getting into a bidding war over Beats. They want to over charge fire the sure deal. Apple then gets to continue to link their hardware with music and can also stay fresh by partnering with a company that is hot with the youth culture.

Carol Nogueira

It definitely makes sense to me. Jimmy Iovine has always said that Apple inspired Beats in the sense that it would be a tech company with great design - he and Steve Jobs were friends and Iovine showed Jobs some of the headphones designs before they were launched to the public. Beats has reached a point where it needs financial support to grow - their move to a new building in Culver City only shows their desire to build themselves a bigger name brand - they're also expanding to other territories. Meanwhile, with the growth of streaming services, Apple's iTunes has lost a lot of users, and iTunes Radio is unlikely to catch up with the more popular services like Spotify, Pandora, rdio, etc. So it makes a lot of sense to acquire a company that's already doing well. It's like that saying: "If you can't beat them, join them".

Cweichen

IoVinE

Paul Whitehead

It's an interesting if hypocritical move. Apple has always prided itself on creating the "best products possible". Beats headphones are far from the best headphone on the market so you see the possible conflict in their fundamental ideals. Having said that, wearable technology is a whole new market and this acquisition could potentially lead to what could be the best inner ear headphone or best iWatch in the future. Only time will tell. (sorry about the pun)

Ben Stauffer

The deal makes sense if Apple is serious about maintaining a leadership position in the music retail space. With 2014 likely the year that downloads have passed their peak and streaming will grow in prevalence as consumers' preferred method of accessing music, it's smart to bring in a team (Iovine, Dre, Rogers?) with relationships and marketing know-how. A smarter play would have been a Spotify acquisition given its market-leading position and Beats's supposedly low subscriber count, but I guess this is the next best thing. And please don't talk to me about headphones being an important part of this deal...

Andre-Claude POTVIN

Apple is high-end tech, Beats is low-end tech. I don't see a good fit between the brands, nor the product lines, nor the business models.

Anil S

Beats is a perfect example of the power of good marketing and brand awareness. Across the board, audio experts and everyday consumers agree that Beats headphones are wildly overpriced (not unlike Apple's products) and yet they still continue to see strong earnings thanks to countless celebrity endorsements, clever product placement and mastery of social media. There is nothing innovative about Beats products nor do they offer an above-average user-experience. Apple essentially bought Beats for their name and in an attempt to capture market-share in the music streaming industry currently dominated by Pandora and Spotify. Beats claims to have the advantage of sophisticated curation from "industry experts" but I found it to be nothing innovative at all. My opinion: Jobs would have never approved of the acquisition.

Anil S

Beats is a perfect example of the power of good marketing and brand awareness. Across the board, audio experts and everyday consumers agree that Beats headphones are wildly overpriced (not unlike Apple's products) and yet they still continue to see strong earnings thanks to countless celebrity endorsements, clever product placement and mastery of social media. There is nothing innovative about Beats products nor do they offer an above-average user-experience. Apple essentially bought Beats for their name and in an attempt to capture market-share in the music streaming industry currently dominated by Pandora and Spotify. Beats claims to have the advantage of sophisticated curation from "industry experts" but I found it to be nothing innovative at all. My opinion: Jobs would have never approved of the acquisition.

Jonny Shorr

As a student studying in the Music Industry at USC, one of my closest friends has been working with Beats Music since way before its launch. This is obviously an extremely heavy investment for Apple, but the company as a whole hasn't been putting out too many new products with the iPad and recent iPhones becoming a past fad. Beats Music is hip, and has proven to have a ton of potential over the last few months. I think it is an app that can keep Apple has a competitor in its market of smart phones, and allow it to fight against the new products by Samsung and other pad companies. Moreover, it will give them the opportunity to re-enter into the music industry, and to battle up against Spotify, that has ultimately replaced the need for iTunes.

Point31

A lot of people have claimed since hours after Jobs passing that Apple had seen it's day and was no longer innovative. Since his passing we haven't seen much in the way of new innovative technology from Apple.

Full disclosure, I am an avid iTunes user and Spotify free is my streaming platform of choice, that being said IMO iTunes is more than capable of being a "Spotify", "Rdio" or "Beats". This isn't innovative technology. A fully open (pay walled even) all access iTunes streaming should of happened after the acquisition of Lala and to Apple's credit they did launch match - which others (Google and Amazon) quickly did too.

However, what makes this a rotten deal are three aspects I can't seem to get over.

1. Apple is drawn to the preexisting paying subscribers Beats has? Really? And how many of them are preexisting apple users? And how many subscribers are there really? Approx. 6 months of service isn't long enough to determine who the core vs. introductory user base is. I know not of a single person who is a user of the Beats streaming service.

2. Apple's headphones suck and always have - but I don't think that Beats labeled headphones will come with your new devices anytime soon - In short, the Apple core user won't benefit. Which leads me to #3.

3. Apple has stated that Beats isn't going to be "Apple" but will remain "Beats" and essentially becomes an asset of Apple. Wha?! Why?! Is this Apples attempt at a diverse portfolio like GE?

In closing, there are tons of other companies who have been in the audio business and have credentials and a brand to back it up that could of been more beneficial and understanding of a merger. The Beats brand much like this purchase have always come off as "just because" and never for much reason and for that reason, I'm out.

Daniel

A streaming service on EVERY iphone? That's great news for the music industry regardless of whether it's good news for Apple.

Reid

Anyone who's listened to music on the standard issue white Apple earbuds knows that the audio quality is awful. There's definitely room for improvement here so why not purchase that improvement and satiate both audio quality and style - two things that Beats has shown there is a demand for

Darryl

Yes,

Though I have reservations. Beats used to be Monster. With a clever marketing plan, Beats has become a household name amongst the youth crowd. It may be a fad, but for now, it has at least 3-5 more years before the rush dies out. With Apple in the driver's seat, it could go for even longer. The ipod was only on top for so long as well, but it made some money while it lasted.

Helen

APPLE + BEATS: Apple should cut all ties and run! Help stop it and sign.
The market has clearly communicated that it doesn't like the idea of a Beats deal with Apple. However, most naysayers and the media have struggled to properly articulate the reasoning for the bearish sentiment.

This is how it should be communicated:

- Beats should be viewed as a fashion company, as they offer very little value-add from a technology perspective. Beats main market are teenagers who currently view the earphones as a "cool" fashion statement. This is the root of the concern, as we all know that fashion statements quickly become "uncool" due to overexposure, boredom, or something more "cool" coming onto the market. It would be fair to say that the best days of the Beats "coolness" are behind it, and the sunset looms as they may soon become "un-cool". Paying $3.2 billion for a company that will probably fade away into "un-coolness" soon is probably not a wise acquisition. One cannot buy long term "coolness", as it must be created or earned.
- Apple could relatively easily create a superior headphone product at a fraction of the cost of the Beats acquisition, and Apple products are still very much "cool" and in fashion
- Apple could improve its streaming service for a fraction of the cost of this deal, and Apple subscriptions and profitability would remain leaps and bounds ahead of the Beats service.

On balance, very poor judgement at the top of Apple if this deal actually goes through.

http://www.forbes.com/sites/gordonkelly/2014/05/09/why-apple-has-lost-the-plot-with-3-2-billion-purchase-of-beats-by-dre/?utm_source=feedblitz&utm_medium=FeedBlitzEmail&utm_content=395530&utm_campaign=0

http://blogs.wsj.com/corporate-intelligence/2014/05/09/apple-spend-3-billion-on-beats-lose-5-billion-in-market-cap/?mod=yahoo_hs

http://seekingalpha.com/article/2206943-apple-would-find-it-difficult-to-integrate-beats-electronics

http://www.businessinsider.com/apple-beats-rationale-2014-5

http://www.hypebot.com/hypebot/2014/05/apple-in-talks-to-buy-beats-electronics-32-billion-said-to-be-mostly-for-headphone-business.html

http://www.digitalmusicnews.com/permalink/2014/05/09/7reasonswhyapplebuyingbeatsisbadidea

Brendon Goldwasser

Not a long explanation. It's a good move because Apple needs to stay on top of the ever-evolving music business and historically they have been at the forefront of new technology that directly affects the music industry. It's a solid move and most parties involved will benefit.

Cathleen

I'm sure Apple understands that streaming will continue to cause music downloads to decrease. This revenue stream must be replaced. The average consumer buys a few albums a year, so if they can find a premium headphone product, they can replace the lost revenue. (Musicians are still screwed) Beats comes with a brand, so they will be easier to sell, and who knows, their investment into wearable tech might create a cloud enabled headset or some wrist device that also works with the headset.

Neal

What does $3.2 billion buy Apple:

1. With Apple's profits from music downloads slowly drying up (iTunes announced the first ever decrease for US music download sales in January 2014), it is clear that streaming is now the only cost-effective and easy to access method of music consumption, at just $10 a month for unlimited, premium music streaming. With access to the whole of iTunes' back-catalogue, this acquisition would give Apple full reign over Beats Music, meaning they would hold an oligopoly over both streaming services and what remains of the digital distribution ownership model.

2. The entrepreneurial and innovative owners of Beats Electronics, Jimmy Iovine and Dr. Dre will join Apple's executive board, adding two creative minds to a company that now appears to be lacking ingenuity and creative vision (one only has to look at the disappointment surrounding the latest iPhone release).

3.The instantly recognisable image of Dre may just well become the new face of the Apple brand, which has been left vacant since the passing of Steve Jobs back in 2011.

4. As wearable technology is slowly becoming a reality, investing in a company with massive brand value that makes 'urban-cool' headphones may just make sense after all. How long is it till we see the fall of the iPod and the rise of the headphones with a built-in streaming service?

Just my 2¢'s.

Helen

Absolutely ludicrous. Apple admits its failure to innovate if it proceeds.


APPLE + BEATS: Apple should cut all ties and run! Help stop it and sign.

http://www.ipetitions.com/petition/stop-apple-beats-acquisition

Zechmann

Apple is buying Beats because of Beats' pull in the music industry. Everything else, the headphones & music service, has potential, but needs a lot of work & direction... which is exactly what Apple can provide!

Osantolalla

Apple is nowadays a slow innovator. Its reign in the digital music is coming to an end ... unless iTunes Radio becomes a big success. Then it's the time to eat one of its comeptitors. Beats is a young company, has a smart team, is not a direct enemy,--and most importantly--is an innovative company. It make sense.

Matthew

It would be ridiculous for Apple to purchase Beats. Even if I thought it was a smart move, 3.2 billion dollars is way too much when we know that Beats has been evaluated at a few hundred million. The only reason Apple could possibly need Beats, is the technology behind their streaming service. Apple could easily make high quality headphones without over paying for another company, and they don't need any celebrity endorsement from an artist that has done nothing in the past 5 years. Dre will soon be irrelevant to Apple's target market(if he isn't already). So if Apple only needs the software and not the hardware, why don't they look at other streaming services like Spotify, Rdio, or Deezer? Beats has only been around for a few months, so I'm not sure how Apple could be attracted to their user base. And of the number of people who subscribe to Beats, how many of them actually use an Apple product? I seriously don't understand how this could be a smart acquisition.

I read somewhere about how Apple's huge iTunes catalog would be a great addition to Beats Streaming service. There's no guarantee that the music on iTunes could be streamed on Beats. Apple would have to go to each label and publishing company and renegotiate all their contracts(unless someone had some serious insight and added a clause for future streaming rights).

I think Apple stepping into the streaming game would be a smart move, but don't think they should take over Beats. They could easily create their own service native to the Macintosh ecosystem, or even purchase a company that has a larger user base.

Patricia Laro-Harper

It is clearly a good move. The one accessory that people have is either a iPhone and Beats headphones. When Beats started the music service they were starting to look like a true contender to compete with Apple iTunes service. This was a smart move.

J. M. Bookout

Apple tried to buy it's way out of the mistake they made 3 years ago - failing to embrace the stream. Maybe this will work, maybe it won't. Either way, they're down, and I'm not sure spending 3.2 billion on Beats will fix it.

Helen

APPLE + BEATS: Apple should cut all ties and run! Help stop it and sign.


http://www.ipetitions.com/petition/stop-apple-beats-acquisition


Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Working...
Your comment could not be posted. Error type:
Your comment has been posted. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.

Working...

Post a comment



Musician & Music Industry Resources


SEARCH HYPEBOT