“Apple CEO Tim Cook looked like he wanted to dance Wednesday as he discussed his company’s $3 billion acquisition of Beats Electronics,” Michael Liedtke reports for The Associated Press. “Cook seems most excited about the potential of Beat’s still nascent music-streaming service, which currently has more than 250,000 subscribers. That’s paltry compared to the more than 10 million people subscribing to Spotify’s rival streaming service, Cook is confident that will change once Beats has access to the data that Apple Inc. has accumulated while selling more than 35 billion songs to more than 800 million iTunes accounts during the past 13 years.”
“‘We are getting the first music subscription service that got it right, that believes in human curation,’ Cook said during a Wednesday interview at Apple’s Cupertino, California headquarters. ‘We think this is killer. The feeling that you get from listening to this service is so different than anything else,'” Liedtke reports. “After generating $1.1 billion in revenue last year, Beats’ sales increased by 30 percent during the first three months this year, Cook said. He expects Beat to boost Apple’s earnings beginning in October. Apple earned $37 billion on revenue of $171 billion in its last fiscal year, so Beats’ initial contribution won’t be that significant financially.”
“Cook says he tries not to ever consider what Steve Jobs might have done if he were still alive, but he insists that his predecessor wasn’t as resistant to acquisition as most people think,” Liedtke reports. “‘We have never been anti-acquisition,’ Cook said. ‘We have looked at some very, very large companies and we decided not to buy them. But we didn’t decide not to do them out of religious reasons. There was no rule, ‘Thou Shalt Not Acquire.’ There was no rule that everything had to be built organically.’ … Jobs ‘knew Jimmy very well and he loved Jimmy very much,’ Cook said.”
Read more in the full article here.
MacDailyNews Take: Figuratively, not literally.
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Where to I sign up?
1 infinate loop, california
I’ve been there before and stood in long lines.
Apple acquisition of Siri was under Steve Jobs’ reign.
Apple partnerships with who they believe will benefit Apple or at least have the intend and inspiration Apple shares. Again and Again – Apple has said it does not create everything from scratch.
Todays innovation is done by PIECING TOGETHER INDUSTRIES ADVANCEMENTS putting a shine on products that blow the competition away. And Only Apple is doing this, all others follow Apples’ lead.
There’s nothing wrong with buying a company that actually makes a profit. Something else Apple does different.
sure, just like Apple’s 2009 acquisition of Lala.
Apple’s desperate attempt to push people into subscription-based computing or music purchasing is not a “killer” deal for anyone except Andre Young and Jimmy Iovine. Some of us like to curate our own music and enjoy high-fidelity electronics, thank you very much. Beats brings nothing to the table that Apple needed. NOTHING.
“The feeling that you get from listening to this service is so different than anything else”
Now that sounds a whole lot like the Apple we know and love.
Billions in hardware revenue, smart & creative people, a solid cloud service, growing product lines. What more could you ask for in a tech acquisition?
as underwhelming as iTune Radio is reported to be , it still isn’t available in Canada !
The pundits have had a field day with this one. But more rational investors are reacting positively. Beats has been a very profitable company. And Apple is buying Beats for only 3X earnings, which is actually a very good deal. Acquisitions are often at least 4 or 5X. So as much as the self-appointed armchair experts (who never ran a company) want to say otherwise for the purpose of click-whoring, it’s actually a good deal for Apple.
Time will tell how it all works out. But on the face of it, big though it may sound, it’s not a lot of cash for Apple to spend. And last I checked, Apple has had an extremely successful track record with acquisitions.
I think you meant 3 times revenue. Big difference. I don’t think we have seen how much their earnings are.
Why the homophobic “figuratively, not literally” remark? You have no idea and why do you care? And why do you think loving someone very much I something to be explained? I literally love LOTS of people of the same sex very much: my father, my husband, my clients, my best friends. I think the clarification of Tim’s comment was childish, really.
You’re right. I didn’t get it until I read your comment. I was like, what?