“When you hear that Apple may buy a well-known company, it’s dangerous to assume that it’s going to happen,” Harry McCracken writes for TIME Magazine. “Actually, based on history, the safest assumption is that the idea is sheer fantasy–there have been countless rumors of such acquisitions which, though always fun to speculate about, never amounted to anything.”
“With that out of the way: Matthew Garrahan and Tim Bradshaw of the Financial Times are reporting that Apple is “closing in” on a $3.2 billion deal to buy Beats, the maker of headphones and speakers (and a new subscription music service) co-founded by Jimmy Iovine and Dr. Dre. They say it’s possible it could be announced next week,” McCracken writes. “I’m not assuming that the acquisition is as real and close to being done as Garrahan and Bradshaw say it is–and even they stress that it could fall apart at the last minute. But even if you just mull it over as a theoretical business transaction which may or may not happen, it raises some obvious questions.”
Such as:
1. Why would Apple make an acquisition so atypical for Apple?
2. Why would Apple want to own an audio accessory company?
3. Or is it the music service that’s enticing?
4. Could it be the brain trust?
5. Would the Beats brand live on in its current form?
6. Would its design aesthetic?
7. Would this be a genius move in a way I’m not seeing?
Much more, as McCracken attempts to answer his questions, in the full article here.
Related articles:
The reason for Apple’s $3.2 billion interest in Beats? Spotify – May 9, 2014
Apple buying Beats Electronics: Its best idea since the iPad? – May 9, 2014
Why would Apple want to blow $3.2 billion on Beats Electronics? – May 8, 2014
Apple in talks to buy Beats Electronics for $3.2 billion – May 8, 2014
If they do buy it and didn’t keep the Beats brand what would be the point? The headphones aren’t that good, and the music service is hardly setting the world on fire to the extent that it would be worth the money on its own.
Maybe it’s just beats beating the drum, hoping that any one of the usual suspects overbids this offer (if it exists at all).
The more I think about it the less I get it. But then again, I’m just a simple white collar worker.
If it comes to pass it’s a generational move. It’s very tough for most of us who post here to identify with the younger generation. A bit of a youth movement would be a good infusion for Apple.
As an example who on this board likes rap. I figured it was like break-dancing and would fade away. Face it trends in pop music are almost always started by black artist. Last time I looked I didn’t see a single executive who fit that category.
Agreed it won’t be that long before Apple starts to have the appeal of Dad dancing as indeed it had once before in its computer days when things were low and kids just wanted computer gaming. This would be an opportunity to reach a very different demographic yet one that is willing to spend big so seems a good fit to me. And it will allow lifestyle products to be introduced without compromising the Apple brand itself.
Just needs to be used appropriately which is probably the only concerning point considering the nature of the Apple board and higher management.
It’s not what people think it is. Wow- how quick we underestimate the company!!!!
Beats DSP. Beats in the Car. Beats audio amp circuitry in PCs, Laptops and Tablets.
In the Car, In the phone, in the tablet, in the PC, in the 4K TV I’m down with Apple Beats.
I can think of a dozen acquisitions that would benefit Apple in the long run.
Zeke, Disney? Adobe, Netflix, Comcast, NFL ticket and much more …
Beat it.
You missed HULU… it’s too bad Apple missed out on the NFL (MSFT snagged some type of exclusive content)…
But i think Netflix would have been an interesting way to go…
Yes, one of the many I neglected to mention. Good you’re paying attention.
I’ll guess it’s not for the headphones. It’s for Jimmy Iovine and his contracts. The headphones are the front side of that company.. It’s the behind the curtain stuff I’ll almost bet is what they want.
Iovine isn’t worth $3.2 billion. If that were the case, then all Apple needed to do was set up a licensing or partnership deal. Why is Cook even considering blowing billions for a company that makes crap hardware marketed at people with poor taste?
Just a story to beat AAPL down, excuse the pun, before WWDC.
Colour me skeptical. I hope it’s just a nasty rumour.
I have an idea. What if Apple, in trying to negotiate a music streaming service can’t get all the players to the table. However with Beats, they can complete the contracts they need, by either acquiring the contracts they need or enticing the holdouts to come forward.
It could be, Apple following through on a “threat” and putting their money where their mouth is, to strong arm a deal, that otherwise Steve could have done just by charisma alone.
It’s a chops building exercise.
What would Samsung do if they took an interest in Beats? Build lookalikes that try to copy the cool factor. Maybe the price premium is to show that Apple will pay fairly for another brand.
Given that Apple is buying back its stock it might make sense to acquire Beats in order to ensure the stock price drops substantially, so that it can buy back its stock at a lower price. If the rumour proves to be untrue, maybe the stock will increase as Apple will be seen to be serious about not throwing its money away on questionable assets.
If that’s the kind of game Apple leadership intends to play, then I’m selling my stock. I want Apple to focus on being a great innovator itself, NOT playing stock market games and gambling on stupid acquisitions. Everyone can point out tons of issues that need to be improved in Apple hardware and software, and that is where leadership needs to focus. Get new innovative products right, and get them to the users. Beats is a stupid distraction that does nothing for Apple and nothing for Apple users.
If Apple is thinking that way it would scare me and probably investors too. Hardly the sort of innovative style that the powers that be are demanding. The company would be crucified for such negative corporate style.
There could be a method to the madness. I was watching CNBC (a network I don’t particularly like, though it’s always on at the gym I attend) and someone said that Beats is in Chrysler vehicles, which could–combined with Apple’s CarPlay tech–strengthen their hand in that particular arena.