Why would Apple want to blow $3.2 billion on Beats Electronics?

“Word, now confirmed by the Financial Times, Bloomberg, The Wall Street Journal, and The New York Times, that Apple is in talks with Beats Audio about an acquisition to the tune of $3.2 billion is surprising only because of the price,” Anthony Wing Kosner writes for Forbes. “The dollar value of Dr. Dre and Jimmy Iovine’s cool aside, there are many things that make sense about the idea. Apple has never been considered a street brand or the maker of particularly good headphones.”

MacDailyNews Take: The latter goes double for Beats.

“And iTunes Radio is far from a Spotify or Pandora killer, so the new Beats Music streaming service could bolster it and declining iTunes sales,” Kosner writes. “But for a company that was valued at $1 billion at the time of the Carlyle Groups investment of $500 million last September, the hyper-inflation of its valuation can only mean that others were in the bidding.”

“Apple has never spent a billion buying another company, something that rivals Google and particularly Facebook can’t say. Facebook, in particular, stacks up as a likely suitor,” Kosner writes. “And, like Apple, Facebook has a cool problem. Instagram and WhatsApp were both attractive because of their teen appeal. Beats would bring not only youth but some amount of urban street cred as well… But Beats is really much better aligned with Apple than any other tech company I can think of. Both have succeeded at launching product line after product line that are a cut above its major competitors in both quality and price.”

MacDailyNews Take: Beats. A triumph of marketing over sound quality. Kosner has obviously swallowed Beats’ marketing hook, line, and sinker. A pox on you, Anthony, for ever daring to mention “Apple” and “quality” in the same sentence as “Beats” whose audio hardware is, to be generous, overhyped mediocrity at best.

You want to kill an audiophile? Just slap a pair of Beats’ headphones on him and press play.

Kosner writes, “My guess is that Beats may have played Facebook or others to drive the price up, but secretly (or not so secretly) have always wanted to be acquired by Apple.”

Read more in the full article here.

MacDailyNews Take: The fact that some poor, tin-eared and/or gullible souls think Beats’ audio products are “quality” is proof positive that some people will believe just about friggin’ anything.

Related article:
Apple in talks to buy Beats Electronics for $3.2 billion – May 8, 2014

64 Comments

    1. Me too. Especially since Monday is the last day you can buy Apple shares and be assured of the receiving the dividend. I half suspect that we’ll get a “Ooops, never mind” story on this purchase sometime next week after the effective “ex-div” date.

    2. I find it dubious that Apple wouldn’t just use the $3.2 BILLION to hire a team of world class audio engineers if it wanted a line of high quality headphones that could beat Beats. Why on Earth would Apple want or need to buy street cred? Their products are already highly coveted. I can’t imagine Apple wasting their money on this. Is the author of the article seriously so delusional to think that the Beats brand is valuable to Apple? I certainly could be wrong. But this doesn’t seem like a very Apple thing to do.

      1. I agree it is very un Apple but we are increasingly in a different market now where teens used to thing blackberries were cool (some still do) and Samsung is the phone to have. It has little to do with quality in this market but perception and like it or not Apple is an increasingly mature brand particularly to the less sophisticated consumer. As such this could be a great addition. if its quality is poor yet it has a very high profile and appreciation amongst this target market then imagine the potential it has as part of Apple. Fact is you can pay all the money in the World in trying to create your own ‘cool’ brand but there is no guarantee of success no matter how good the quality especially as ensuring quality will usually put it outside of the market you are aiming for. iTunes is old hat now and having an ‘iTunes’ branded radio might even be an anchor on its progress in the market it is aiming at.

        This buy could be seen as defensive or ambitious depending on how you look at it and indeed how it is employed but its good to see a bit of thinking different either way.

    3. Either Apple didn’t want someone else to buy them or Apple wants to merge their Apple technology into Beats products. Consider incorporating an iPod into the Beat head phones or wireless CarPlay so the adults in the front can drive in peace.

  1. This has to be a joke. Nobody can come up with a single reason why this makes any sense. Certainly not the clown who wrote that article. How dare he compare that Beats garbage to true revolutionary products that changed the way we interact with the world.

  2. This sounds like the sort of overvalued acquisition Google/Microsoft/Facebook would make, not Apple. Apple doesn’t do that sort of panicked/emotional acquisition.

    If it’s true, there’s no way it’s Apple “buying cool” – it only makes business sense if it pays off in revenue from streaming, or in technology possessed by Beats.

  3. I knew that Tim is a gay man, a runner, and abnormally rich, but I didn’t know he was deaf, too.

    God, Beats does so suck.

    $3.2 billion?! If true, get ready for Sculley II, folks.

    1. I managed to acquire beats headsets and beats earbuds. What crap. Its like samsung, all marketing and no quality.

      Apple, please RUN AWAY…. Also, Apple ear buds that seal in the ear ($90) were rated in the top 5 best ear buds in America some years ago. Really good quality and sound.

    1. I have little opinion on Cook. But Ive should not be fired. But he SHOULD be reassigned to just doing hardware. He’s really good at that. His iOS 7 design, however, sucks balls.

  4. The only problem with Tim Cook is… … he just has no taste. Tim is basically unimaginative and has never invented anything, which is why I think he’s more comfortable now in firing his competition than being a leader. He just shamelessly rips off other people’s ideas.

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