“What is so troubling is that in spite of Beats having dominated the market for high-end headphones, there’s significant doubt regarding the audio quality of these headphones,” Paulo Santos writes for Seeking Alpha. “Audiophile site after audiophile site says… Beats sells because of branding, not because of audio quality.”
“Indeed, with just 30 employees back in 2010, it seems obvious that Beats took the OEM route to build its products. What this means is that Beats probably only customized the looks of generic audio products produced in China, while not providing much in the way of technical advances to justify a higher qualify breakthrough,” Santos writes. “So Beat’s success, much like Skullcandy’s, was just a matter of branding/fad.”
“If Apple was serious about quality, Apple could have bought other players. For instance, Sennheiser is a reputed maker of quality headphones, and it had revenues of around $800 million in 2012, so not much different from Beats and with a wider presence around the world. Sennheiser has a long list of patents in the space. Whereas Beats’ patents are seemingly more along design cues,” Santos writes. “$3.2 billion is a rounding error for Apple, but the change in priorities is not. Apple faces tremendous risk if it starts to give more importance to branding and image, than to the underlying quality of its products.”
Full article here.
Related articles:
If Apple’s really buying Beats, here’s hoping it’s brilliant in a way which isn’t immediately obvious – May 9, 2014
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
Beats audio stuff blows. Big mistake.
Beats sells different lines of products. The ones you put batteries into are unsurprisingly not audiophile friendly. I have a pair of their mixr cans though, and they are fantastic. Powerful, flat response, well designed and durable. A lot of people opinionating on their quality who really have no idea what they are talking about. Same with speakers – the beats pill is a piece of crap but the big box is nice kit. So I don’t worry that they can make good product, just that they don’t always do so.
laugh at me all you want, but Tim Cook is going to be one of the worst CEO’s ever. Apple better off bringing back sculley.
The fact of the matter is, many realize that Tim Cook is a joke, outside of MDN.
On MDN, criticizing Cook is an exercize in futility.
In reality, however, he’s not just the most incompetent CEO on earth, he’s not even the most incompetent CEO in our galaxy, he’s the most incompetent CEO in the universe!
Ridiculous.
Orandy… you are how old?
It’s difficult to believe Apple would spend $3.2 billion on a headphones company. They could produce high quality headphones if they wanted to without anyone’s assistance. Everything Apple does is highly scrutinized by people who have no experience running a hugely successful tech company, so I take all those observations with a grain of salt. Only time will tell why Apply might be interested in Beats and whether or not such an expensive purchase was worth the money.
But Apple can’t create a hot, hip brand of headphones. That’s the problem. And Beats is Top Dog among teens and young adults who love their bass cranked up.
Maybe Apple actually makes BEATS better… quality wise…
Apple might actually improve the quality of Beats…
But yes… i am scratching my head on this acquisition. Maybe they are also buying the guys that negotiate with the labels…
Only time will tell.
The purchase would be for intellectual reasons and not the product line. To make iTunes and radio a success. They also contribute a cool factor that appeals to the youth. You can’t lose by adding this to an already cool apple.
This is less about Beats, and more about Jimmy Iovine and his negotiating power with the labels.
^^^ THIS.
“Just get rid of the crappy stuff and focus on the good stuff.”
–Steve Jobs’ advice to Nike CEO Mark Parker
Steve, we miss you.
It’s refreshing to see here that people are aware that Beats are all about branding, and gimic, not quality. Of course that’s regarding their hardware. Friends have told me that the music service looks promising, but this was when iTunes Radio was coming out and I thought (incorrectly in my now humbled opinion), that iTunes Radio would spank Pandora and every other service out there.
I haven’t tried it yet, but I have to think buying Beats is ONLY about that and the people and nothing to do with the crappy overhyped headphones.
Cook: What? The labels will negotiate good deals with Beats and not with Apple? Let’s buy Beats so they have nobody else to negotiate with!
It won’t happen. The tech press is a bunch of wagon-hopping, rumor propagating dickholes.
http://themacadvocate.com/2014/05/09/apple-is-not-buying-beats-audio-you-idiots/
rumormongers rejoice
a new titalating news vapor to make themselves look so smart…
“…the 70+ news outlets that don’t seem to mind fluffing this flaccid cock of a rumor…”
That’s funny.
If this is true, then I too would have to go to the “Tim Cook is the wrong guy for the job” camp. Notice how the stock is down? Perhaps this is another play by the shorts faternity helped along by the boys at the WSJ. I certainly hope so.
I think Apple wants Beats’ music licenses, its people (who have connections with the music business), and its ad-revenue-prospects. Not its technology.
When you consider that for the same money Apple could have bought all the handset technology and patents of Nokia you have to wonder what hip_hop and a very niche website and product range really has to offer a No.1 technology company. Much more the sort of thing FB could be wasting their investors money on,
Apple has struggled and struggled in the headphones arena, with its products pretty good although receiving mass criticism for fit and low end range.
IF this acquisition is true, Beats instantly adds hipness and coolness to Apple products, particularly if Apple bakes Beats Audio into its devices. Are Beats the best? No, but amongst teens and young adults, Beats is the best.
Here’s the big, BIG difference: Teens think Beats headphones are the best out there, pretty much universally. Teens are not audiophiles and do not hang out on audiophile websites.
Plus, some Android phones are building Beats Audio into their devices. Is it better than Apple’s built-in audio? Probably not. Is it important? Yes. It is a difference maker to the generation which most frequently upgrades consumer devices. It adds image to Apple’s brand. And Apple can roll its audio technology into Beats Audio, improving both.
It’s a much better purchase than Google buying Motorola, HP buying Palm, etc. etc. The brand is hot, and it drives sales.
Hot = Fad – not worth $3.2B! Only if Cook wants to join the “look how stupid I am” club like HP, Google and MS have all done in the recent past does this make any sense.
“Teens think Beats headphones are the best out there”
Doesn’t matter. Apple shouldn’t attach their name to crap, no matter how many people like it.
Just because Google and Microsoft make bad purchases doesn’t make this purchase by Apple a good one.
Dump this fukkking fahgott
I don’t think think it’s at all for the sole purpose of acquiring the headphone hardware.
http://venturebeat.com/2014/05/09/beats-by-apple-why-a-deal-makes-sense-and-what-it-says-about-todays-apple/
Sennheiser would offer little to Apples needs, I can’t for one minute think that this move is to add head phone peripherals to the Apple market plaice, if so they could do it a lot cheaper. If they want to Apple can use its buying power to make the products as good as the brand but I think that is not the main reason for a deal like this. This is a brand with massive traction amongst the sort of demographic that I suspect Apple is about to launch products into. And it might be a lot safer introducing them in this way than doing so under the Apple brand at least initially because as we know everything launched under the Apple brand tends to attract black and white responses and without Steve Jobs unique ability to defy gravity any new product launch is going to be very difficult to ensure success. This brand would allow a lot of flexibility in supporting the Apple brand without being tied to what it stands for. It can allow expansion of the Apple ecosystem without watering the brand, it can be more experiemnetal too and quality can be brought up to what Apple itself expects within the price brand.
Potentially this could be a brilliant move taking away some of the fear of getting things wrong which is becoming a bit of an anchor on Apple itself.
This is one obvious disaster for Apple!
I can’t believe these garbage headphones sell at all. People have no idea of quality sound. I suppose apple doesn’t care either….. I mean the sound of a downloaded/compressed song from iTunes is just terribly harsh and body-less.
Maybe that why apple is combining with these muffled sounding headphones…..
Apple is missing Steve Jobs ability to negotiate and innovate.
Apple buying Beats makes complete sense because both brands
are being loved by uniformed ignorant teenagers and fad following
morons who have no idea about quality and chasing being cool.