Apple CEO Tim Cook’s pursuit of Beats seen presaging more takeovers

“Tim Cook is making a habit of breaking with Apple Inc.’s past,” Peter Burrows reports for Bloomberg.

“The chief executive officer is overseeing talks to purchase Beats Electronics LLC, the headphones and music service company founded by music-industry executive Jimmy Iovine and hip-hop artist Dr. Dre, for $3.2 billion, people with knowledge of the matter have said,” Burrows reports. “That goes against the playbook of Apple co-founder Steve Jobs, who never paid more than a few hundred million dollars for an acquisition, choosing to buy small companies designed to bring in technology and talent. Buying Beats will also signify Cook’s willingness to use Apple’s $150.6 billion in cash more aggressively, according to Gene Munster, an analyst at Piper Jaffray Cos. in Minneapolis.”

“‘This opens the door to do more mergers and acquisitions, and I think you’ll see more deals around content and products,’ Munster said,” Burrows reports. “Apple’s possible targets include Yelp Inc., payments company Square Inc. and Twitter Inc., Munster said.”

“Until now, Cook has closely followed Jobs’s mergers strategy. The Cupertino, California-based company has bought 24 companies over the past 18 months, mostly small,” Burrows reports. “The biggest-ever acquisition was the $400 million Apple paid in 1997 to buy Next Computer Inc. as part of a deal to bring Jobs back to the company. Since then, the largest known purchase was Anobit Technologies Ltd., a flash-memory drive maker, for about $390 million two years ago.”

Read more in the full article here.

Related articles:
Former eMusic CEO explains why Apple wants to buy Beats – May 12, 2014
Apple’s deep ties with Jimmy Iovine key driver of Beats deal – May 12, 2014
Removal of Dr. Dre video about Apple-Beats deal likely means acquisition is real and imminent – May 10, 2014
Game changer: Apple buying Beats could radically transform the digital music business – May 9, 2014
If Beats deal happens, Apple is acquiring a fad, not quality, and that is troubling – May 9, 2014
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

19 Comments

  1. Instead of returning cash to shareholders and paying a larger cash dividend, I wish the cash was being used instead for more acquisitions, both large and small. There was a time when they almost could have pulled off a purchase of Disney. That would have really given them some muscle in terms of expanding their Apple TV business and negotiating with the cable operators.

  2. These analysts are over analyzing this RUMORED acquisition. This could be a simple case of Apple seeing something about Beats that would be a great addition to their technology portfolio. This acquisition would in no way indicate that Tim Cook is ready to do more large acquisitions. Something has to happen more than once for it to become a major change in Apple’s normal acquisition behavior. So far, this is only rumored. Until there’s an actual announcement from Apple, this is all speculation.

  3. Dropbox – second time is the charm. Build it into iCloud.

    Square – Apple needs to own digital payments and Square has the most traction of the bunch. Touch ID can be added to the offerings.

    NFL Sunday Ticket – Content is king and nothing says we came to play than buying the rights to the NFL when the contract expires after the 2014-15 season.

    Exclusives – Lock in the best Apps and games as exclusives to iOS or buy them up and integrate them in the OS.

    1. You must be kidding. Integrating games into the OS ?!?!?!?!?

      Apple has to stop the bloat of its OS and split off optional apps that only a few of its users actually want. GameCenter is just the first of many that needs to be taken out. Download it if you want it, but stop forcing this crap on people who don’t.

  4. I don’t get the deal nor the price. If it happens it’s probably because friends do business with friends and this will be a waste of money.

    Contrary to a previous post, I would rather see money go towards smart acquisitions, not just any acquisition. And Apple can do that and continue the dividends, et al.

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