If Beats deal happens, Apple is acquiring a fad, not quality, and that is troubling

“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

34 Comments

  1. 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.

    1. 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!

  2. 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.

    1. 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.

      1. 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.

  3. 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.

  4. 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.

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